The seasonally-adjusted HSBC India manufacturing PMI recovered from an 18-month low of 54.9 in December to 56.5 in January. The reading highlighted the strongest improvement in the health of the sector since last September.
Spurred by positive demand trends, firms noted the fastest increases in new orders and production in four months.
International sales also expanded at a quicker pace, while companies scaled up input purchasing and became even more optimistic towards the year-ahead outlook for output, the rating agency said in a release.
There was a modest increase in input prices which, combined with rising labour and transportation costs, underpinned a quicker uptick in output charges.
New orders placed with Indian goods producers rose at a sharp pace in January—the strongest in four months. Growth was reportedly boosted by marketing efforts and demand buoyancy.
The upturn in overall sales was supported by a further increase in new export orders.
Goods producers reported stronger demand from clients spread across Africa, Asia, Australia, Europe, the Middle East and the Americas. Collectively, the rate of expansion in international orders was the fastest since last October, S&P Global Ratings said.
Positive sales developments encouraged companies to scale up production volumes. Output rose to the greatest extent in four months.
Input costs, meanwhile, rose at the quickest rate in three months, albeit one that was moderate and among the weakest seen in three-and-a-half years.
Rising input prices and demand strength, alongside greater transportation and wage costs, led manufacturers to increase their own fees in January. The average rate of charge inflation quickened to a three-month high and matched its long-run average.
Goods producers collectively recorded the fastest increase in outstanding business volumes in 15 months, with demand strength reportedly exerting pressure on their capacities.
The vast majority of survey participants opted to keep payroll numbers unchanged in January.
New product enquiries and diversification, alongside demand strength and publicity, boosted business confidence in January. Panelists were at their most upbeat towards the year-ahead outlook for output in 13 months.
ALCHEMPro News Desk (DS)
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