India's Manufacturing Sector Growth Fell to Two-Year Low in December
New Delhi: India’s manufacturing sector lost momentum in December, expanding at its slowest pace in two years as domestic demand weakened and firms cut back production, according to the latest HSBC India Manufacturing PMI compiled by S&P Global.
The index fell to 55.0 from 56.6 in November, its lowest level since December 2023, Reuters has reported. It has, however, remained above the 50 mark that separates growth from contraction.
The slowdown reflects a broader cooling in the economy after India posted over 8% growth in the July–September quarter. On the purportedly significant growth figures as well, analysts had noted that the number hid concerns on the underlying robustness and sustainability of growth in India.
"Even with easing growth momentum, the manufacturing industry wrapped up 2025 in good shape. The sharp rise in new business intakes should keep companies busy as we head into the final fiscal quarter, and the lack of major inflationary pressures could continue to support demand," The New Indian Express quoted Pollyanna de Lima, associate director at S&P Global Market Intelligence, as having said.
New orders rose at their weakest pace in two years, according to the Reuters report, driven mainly by softer domestic demand. This fed into labour markets, with hiring nearly stalling as the employment index slipped to its lowest level since early 2024, signalling near-stagnant job creation.
Factory output also cooled sharply, growing at its slowest pace in 38 months, as manufacturers cited fewer customers. External demand provided limited support, with export growth slowing to a 14-month low amid the impact of high US tariffs on some Indian goods. A weaker rupee has yet to significantly boost exports.
Inflationary pressures remained muted, with only modest increases in input costs and the slowest rise in selling prices in nine months. Business confidence, the report also says, fell to its lowest level in nearly three-and-a-half years.
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