BENGALURU: A business survey found on Monday that India's manufacturing sector ended 2022 on a strong note because business conditions improved at the fastest rate in over two years and growth in new orders and output accelerated.
The assembling buying directors' list, gathered by S&P Worldwide, rose to 57.8 in December from November's 55.7, better than a Reuters survey middle estimate for 54.3.
The reading in December was higher than the 50-mark that separates growth from contraction for the 18th consecutive month, making it the highest since October 2020. The survey was taken from December 6 to 19.
The data released on Monday strengthened the view that the third-largest economy in Asia is in a better position than many other emerging economies to withstand the effects of a possible global recession.
"Following a promising beginning to 2022, the Indian assembling industry kept areas of strength for an over time, enveloping the year with the best extension by creation seen since November 2021," noted Pollyanna De Lima, financial matters partner chief at S&P Worldwide Market.
"Among the reasons provided by businesses for improvements in numerous measures, demand strength took center stage. As businesses tried to boost production and keep healthy inventories, they bought more materials and hired more employees. "Input stocks rose at a rate close to a record."
Exports increased at the slowest rate in five months as a result of slower global demand, despite the fact that both new orders and output continued to grow strongly.
However, as the rate of job creation fell to a three-month low, rising domestic demand did little to improve employment conditions.
In December, although input price inflation remained relatively muted, manufacturers' prices for their goods rose at the fastest rate since mid-2022.
That could keep overall inflation above the Reserve Bank of India's medium-term goal of 4% over the next few months, reducing the likelihood that the central bank will ease its monetary policy anytime soon.
The outlook for the coming year was unchanged, remaining close to historic highs. The only time the index fell was in November, when it reached its highest level in over seven and a half years.
"Manufacturers were strongly confident in their ability to lift production from current levels," De Lima added. "While some may question the resilience of the Indian manufacturing industry in 2023 amid a deteriorating outlook for the global economy,"