PMI Manufacturing for the month of May-22, remained broadly unchanged at 54.6 from 54.7 in Apr-22 indicating a sustained recovery across the sector. Export orders and production rose at a similar rate as was recorded in Apr-22. Despite continued uptick in selling prices, overall new orders showed resilience in May-22 with export orders increasing at a fastest pace since Apr-11.
PMI services scaled to an 11-year high of 58.9 in May-22 from 57.9 in Apr-22. The improvement has been led by the ongoing revival in the contact intensive services, uptick in new business orders and strengthening demand conditions.
Improvement in PMI manufacturing and services led composite PMI to also increase to 58.3 in May-22 from 57.6 in Apr-22.
Says Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research "The healthy PMI print of Apr-May'22 raises hopes on the strength of the current economic recovery despite the strong inflationary headwinds. The momentum in PMI services largely reflects the play out of pent up demand in contact intensive sectors such as travel, hospitality and entertainment. As the economy frees itself completely from the shackles of the prolonged pandemic, we expect the services sector to play a dominant role in the growth dynamics vis-à-vis the manufacturing sector. Although the base factor will not be that supportive, we have retained our GDP growth forecast for FY23 at 7.2% given a stronger than expected recovery in the services sector boosted by the high vaccination coverage along with other drivers such as higher public capital expenditure, a pickup in private sector investments and no negative surprise on the southwest monsoon front."