India PMI seen steady at 57-59 in FY27 amid mixed manufacturing outlook: Report
New Delhi, July 2
India's PMI is expected to stay firm in the 57-59 range in FY27, with IT and healthcare as key growth drivers, while manufacturing recovery led by autos, metals and construction materials will likely depend on easing input costs, West Asia conflict resolution, sustained capex and PLI-led investments, according to a Brickwork report.
The report said India's PMI landscape reflects a cautiously optimistic outlook, with the services sector remaining resilient and supporting consumption and job creation, even as manufacturing activity moderates amid the West Asia conflict and elevated input costs.
It noted, while composite PMIs maintained a firm expansionary trajectory, with manufacturing in the 56-58 range and services in the 58-60 range, supported by robust demand conditions, IIP and core sector output, averaging 5-6 per cent and 7-8 per cent year-on-year respectively, signal strengthening industrial production and a gradual narrowing of the output gap.
"This procyclical acceleration is driven by increased fiscal spending and optimized capacity utilization across the steel, cement, and refinery verticals.to remain positive, supported by government spending and improving capacity utilization," the report said.
While flagging a slowdown in India's manufacturing activity in March, with the PMI slipping to 53.9, the report noted that the composite PMI remained firmly in expansionary territory, broadly in line with the Reserve Bank of India's revised FY27 GDP growth forecast of 6.7 per cent.
It added that record export order growth helped offset softer domestic demand, while the Reserve Bank of India's neutral policy stance and active liquidity support ensured steady credit transmission across sectors.
Overall, "India's PMI landscape pointed to a cautiously optimistic outlook, with resilient services sustaining consumption and job creation even as manufacturing moderated amid the West Asia conflict and rising input costs," it said.
Looking ahead to FY27, the PMI is expected to remain firm in the 57-59 range, supported by strong digital exports, robust urban consumption and expanding trade linkages through India-US and India-EU agreements, with information technology and healthcare emerging as key growth anchors.
At the same time, a recovery in manufacturing -- led by autos, metals, and construction materials -- "hinges on West Asia conflict resolution, easing input costs, and sustained transmission of government capex and PLI-led investment," it noted.
— ANI
Reader Comments
As someone tracking Indian markets from abroad, these numbers are quite encouraging - 58-60 in services is solid. But I do wonder if the 57-59 PMI forecast assumes the global environment remains stable. One black swan event could shake things up, no?
Honestly, I'm cautiously optimistic but we need to see this translate into more jobs, especially for youth. The IT sector is great but manufacturing is where the mass employment is. If input costs don't ease and West Asia doesn't calm down, small businesses in metal and auto sectors will suffer 😔
Interesting report. The 53.9 manufacturing PMI in March is a gentle reminder that we're not immune to global headwinds. Still, the government's capex push and PLI schemes are sensible moves. If these trade deals with US and EU materialize, FY27 could be a year of sustained growth. But please, no more inflation surprises! 🙏
All this talk about PMI and GDP is fine, but ground reality for a common family is different. Petrol prices and vegetable bills are still high, and job creation isn't keeping pace. The services sector may be bullish, but let's not forget that India needs inclusive growth, not just numbers on paper. Hope the government focuses on small businesses too! 🏭
As someone working in auto ancillary, I can tell you input costs are a genuine pain point right now. Steel and commodity prices are volatile. If West Asia tensions ease and export orders keep growing, we'll be in a sweet spot. The PLI scheme is good but its impact takes time
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