However, rising domestic demand did not improve labor market conditions as the rate of job creation fell to a three-month low.
While input price inflation remained relatively low in December, the prices manufacturers charged for their goods rose at the fastest pace since mid-2022.
This could keep overall inflation above the Reserve Bank of India’s medium-term target of 4% in the coming months, making the central bank less likely to ease policy anytime soon.
Optimism about the next 12 months was little changed, remaining near historic highs. The index had fallen only from November when it was the highest in seven-and-a-half years.
“While some may question the resilience of the Indian manufacturing industry in 2023 amid a worsening outlook for the global economy, manufacturers were confident of their ability to ramp up production from current levels,” De Lima said.
