India's Factory Activity Witnesses Significant Boost, Registers Four-Month High In April

India's factory activity surged in April, propelled by robust growth in new orders and output, as per a private survey.

This shows strong demand and a promising future.

Survey indicates India's economy will maintain fast growth, despite the global slowdown affecting other nations.

S&P Global's compilation of the Manufacturing Purchasing Managers' Index (PMI) revealed an increase to 57.2 last month from March's 56.4, which marks the 22nd consecutive month where the PMI remained above the 50-mark separating growth from contraction.

In April, production growth improved due to a strong increase in new orders.

Companies enjoyed moderate price pressures, and better international sales with improving supply chain conditions, according to the economics associate director at S&P Global Market Intelligence, Pollyanna De Lima, reported Reuters.

"It seems like Indian manufacturers have abundant opportunities to keep powering ahead. Besides seeing the strongest inflow of new work in 2023 so far, capacities were expanded through job creation, input buying was lifted," De Lima said.

In April, firms resumed hiring as new orders and output grew at their fastest pace since December after a decline in March. Foreign demand grew rapidly and optimism improved in April, the fastest in four months.

De Lima stated: "Manufacturers are certainly upbeat towards growth prospects, with optimism improving from March's eight-month low on the back of contracts pending approval, rising client enquiries, marketing initiatives and evidence of demand resilience."

According to the survey, input costs rose at a faster pace in April. However, due to the improving demand, businesses were able to transfer some of that burden to consumers, indicating that retail inflation may not decelerate significantly in the near future.

A Reuters poll showed that inflation is predicted to be 5.3 per cent this fiscal year and 5.0 per cent next, staying higher than the Reserve Bank of India's 4.0 per cent medium-term target, according to the report.