Manufacturing activity shows recovery from 55 in Dec to 55.4 in Jan: PMI
“Indian manufacturing firms saw a rebound in January, driven by increased new orders, output, and employment," said Pranjul Bhandari, Chief India Economist at HSBC.
- Feb 2, 2026,
- Updated Feb 2, 2026 12:52 PM IST
India’s manufacturing sector showed modest recovery in January, with the HSBC India Manufacturing Purchasing Managers’ Index (PMI) rising from 55 in December to 55.4. This upturn follows a two-year low in December and signals expansion, as any reading above 50 denotes growth. The rebound was primarily attributed to stronger new order inflows and continued uptick in production and employment, despite a backdrop of declining business sentiment among manufacturers.
The PMI survey, based on responses from around 400 manufacturers, indicated that while overall demand, especially in the domestic market, supported production, business confidence fell to its weakest since July 2022. Only 15 per cent of surveyed companies projected output growth in the coming year, with 83 per cent expecting no change.
“Indian manufacturing firms saw a rebound in January, driven by increased new orders, output, and employment. Input costs rose moderately, while the pace of growth in factory-gate prices eased, resulting in slight margin pressure for manufacturers,” said Pranjul Bhandari, Chief India Economist at HSBC.
Survey participants mentioned that demand buoyancy, new business growth and tech investment supported production.
Export performance showed slower momentum, with overseas sales rising at a weaker pace. Firms that experienced an uptick cited greater demand from Asia, Australia, Canada, Europe and the Middle East.
Staffing levels continued to improve, with goods producers hiring more employees, albeit at a 'slight' rate that marked the fastest job creation in three months. The survey underscored that recruitment has not matched the quicker pace of new orders.
On pricing, the report noted that input prices increased to their highest level in four months. Output charge inflation, however, eased to a 22-month low. “Although output charges rose, the rate of inflation was modest and the weakest in nearly two years. Many firms suggested that improved efficiency, better cost management and market rivalry prevented them from increasing their fees,” the survey said.
“Despite faster growth in new orders, business confidence remains muted, and expectations for future output have declined to their lowest level since July 2022,” Bhandari added.
India’s manufacturing sector showed modest recovery in January, with the HSBC India Manufacturing Purchasing Managers’ Index (PMI) rising from 55 in December to 55.4. This upturn follows a two-year low in December and signals expansion, as any reading above 50 denotes growth. The rebound was primarily attributed to stronger new order inflows and continued uptick in production and employment, despite a backdrop of declining business sentiment among manufacturers.
The PMI survey, based on responses from around 400 manufacturers, indicated that while overall demand, especially in the domestic market, supported production, business confidence fell to its weakest since July 2022. Only 15 per cent of surveyed companies projected output growth in the coming year, with 83 per cent expecting no change.
“Indian manufacturing firms saw a rebound in January, driven by increased new orders, output, and employment. Input costs rose moderately, while the pace of growth in factory-gate prices eased, resulting in slight margin pressure for manufacturers,” said Pranjul Bhandari, Chief India Economist at HSBC.
Survey participants mentioned that demand buoyancy, new business growth and tech investment supported production.
Export performance showed slower momentum, with overseas sales rising at a weaker pace. Firms that experienced an uptick cited greater demand from Asia, Australia, Canada, Europe and the Middle East.
Staffing levels continued to improve, with goods producers hiring more employees, albeit at a 'slight' rate that marked the fastest job creation in three months. The survey underscored that recruitment has not matched the quicker pace of new orders.
On pricing, the report noted that input prices increased to their highest level in four months. Output charge inflation, however, eased to a 22-month low. “Although output charges rose, the rate of inflation was modest and the weakest in nearly two years. Many firms suggested that improved efficiency, better cost management and market rivalry prevented them from increasing their fees,” the survey said.
“Despite faster growth in new orders, business confidence remains muted, and expectations for future output have declined to their lowest level since July 2022,” Bhandari added.