New Delhi: India’s manufacturing output growth dipped to the lowest level in two years, dragged by weak demand and export orders, as per an industry survey report released by S&P Global on Friday.
Purchasing Managers’ Index (PMI) for manufacturing fell to 55 in December, from 56.6 in the previous month. It has declined sharply after hitting a near five-year high of 59.2 in October.
A PMI reading above 50.0 signals an expansion in the sector, whereas a value below 50.0 indicates contraction. Despite the slowdown in growth, the data indicates an increase in output.
“Even with growth momentum easing, India's manufacturing industry wrapped up 2025 in good shape,” said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.
“The sharp rise in new business intakes should keep companies busy as we head into the final fiscal quarter, and the lack of major inflationary pressures could continue to support demand,” she added.
Growth in manufacturing output in December was the slowest since October 2022.
Part of the slowdown in total sales reflected a softer increase in international orders. New export orders rose to the least extent in 14 months. Where growth was signalled, panellists cited better demand from clients in Asia, Europe and the Middle East, S&P Global noted in its monthly report.
"We have seen a steady spell of softer growth in new export orders. In fact, the share of companies signalling higher international sales in December was about half of the average for 2025,” said De Lima.
The pace of job creation in December was the lowest since March 2024. Outstanding business volumes did rise in December, but the pace of accumulation was only marginal as indicated by the respective seasonally adjusted index registering close to the no-change mark of 50.0.
The rise in stocks of purchases was the least pronounced in two years amid a softer upturn in buying levels and the usage of materials to supplement production.
December data indicated another increase in input costs at Indian manufacturers, which they attributed to greater prices for bamboo, chemicals, glass, leather and packaging. Little-changed from November, however, the rate of inflation was below its long-run average and among the lowest seen in 2025. Output prices likewise increased at a softer pace, one that was the least pronounced in nine months.
Business sentiment in December was the lowest in close to three-and-a-half years. While advertising, positive demand trends and new product releases were seen as tailwinds to the outlook, some firms were concerned about competitive pressures and market uncertainty.