India factory activity cooled in March with oil costs rising amid Middle East turmoil: PMI

Bengaluru: India’s manufacturing sector grew at ​its slowest pace in ​nearly four years in March as ​the war in the Middle East stoked uncertainty, disrupted supply chains and dented demand, while higher oil prices drove up ‌input ⁠costs, a ⁠private survey showed.

Here are the key details:

* The HSBC ​India Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, fell ​to 53.9 in March from 56.9 in February, broadly in line with a preliminary estimate of 53.8.

* ​New orders – a key gauge ⁠for demand – ‌and output expanded at their weakest rate ​in ​close to four years.

* “Disruptions linked to ⁠the conflict in the Middle East are reverberating ​through the global economy and weighing on ​Indianmanufacturers,” said Pranjul Bhandari, chief India economist at HSBC.

Also Read: India manufacturing growth hits four-month high in February, PMI shows

* Export orders surged to a six-month high in March. * Firms faced their steepest cost pressures since August2022, with prices for aluminium, ‌chemicals, fuel and steel allrising sharply.

* Despite the surge in input costs, companies raised ​sellingprices ​at the slowest ⁠pace in two years. * Employment growth stayed solid in March with the pacehitting a seven-month high as ​firms added staff to clearbacklogs and support expansion plans.

Also Read: India’s economy shows early strain; CEA warns of ‘significant’ hit to growth, inflation, balances in March review

* Manufacturers remained optimistic about the year aheadwith sentiment reaching its highest since May 2024 onexpectations of agricultural strength and capacity expansion.