Hot Stuff This Week: Manufacturing PMI at 13 months high
India’s manufacturing activity finished 2022 on a strong note aided by improvement in business conditions. (at second fastest pace during post pandemic period). December 2022 Manufacturing PMI numbers were highest since October 2020.
Manufacturing PMI rose to 13 months high of 57.8 in December 2022 against a reading of 55.7 in November 2022. The number above 50 indicates expansion and lower than 50 indicates contraction.
Source: CMIE
The manufacturing PMI data further gave confidence that Asia’s third largest economy is better placed than other emerging economies. The data also supports the fact: India is very well equipped to weather the impact of a likely recession in western parts of the world.
Source: Trading Economics. Data as on Dec 2022.
India has outpaced all major Asian countries in terms of manufacturing PMI in Dec 2022. The overall growth in December was not only led by increase in sales numbers but also by hiring activity within the sector. Outlook for production of companies were optimistic in S&P Global survey. Demand buoyancy and advertising were sighted as the key opportunities for growth.
What are the key prospects working in favour of manufacturing sector?
Source: EY India Tax Insights FY 22, Fisdom Research, Mirae AMC, Data as on Sep 30, 2022 * ₹40,951 for Large Scale Electronics ₹7,325 for IT Hardware
Below are the sectors and companies that have benefitted from the PLI scheme push:
Source: HDFC Securities: PLI Manufacturing Report 2022 Fisdom Research Mirae Asset AMC
Way Forward:
Currently India is considered to be the second most favourable player for manufacturing. Key developments within industrial clusters accessibility to credit, and government initiatives are set to drive India’s manufacturing sector. Amid Russia Ukraine conflict and US-China trade war India stands out to be the most favourable looked upon destination by global giants.
Market This Week
Source: BSE, NSE
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