The country’s manufacturing activity rose to a 26-month high of 57.8 in December, the highest increase in new factory orders and production. The private survey also said fresh hiring saw improvement.

The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) stood at 57.8 in December up from 55.7 in November, as business conditions improved to the greatest extent in over two years.

The December PMI data pointed to an improvement in overall operating conditions for the 18th straight month. In PMI parlance, a print above 50 means expansion while a score below 50 indicates contraction.

“Following a promising start to 2022, the Indian manufacturing industry maintained a strong performance as time progressed, wrapping the year with the best expansion in production seen since November 2021,” Pollyanna De Lima, economics associate Director at S&P Global Market Intelligence, said.

The survey noted that the December data highlighted a further increase in buying levels among goods producers as the rate of expansion was historically sharp and the strongest since May 2022.

“Hiring activity was stretched to December, while more inputs were acquired as firms sought to supplement production and add to their inventories. Input cost inflation was contained, but there was a solid and quicker increase in selling prices”, the survey said.

Demand resilience boosted sales growth in December. Panellists continued to obtain healthy inflows of new business, and stepped up production to the greatest extent seen since November 2021.

Factors that supported sales growth include, advertising, product diversification and favourable economic conditions.

“Less challenging supply-chain conditions also supported the upturn,” Lima said