Manufacturing PMI at 12-month low casts gloom over growth hopes

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In response to these rising costs and to protect margins, manufacturers raised selling prices in December. According to the PMI survey, selling prices increased at a pace that outstripped cost burdens and was significantly higher than the near 20-year series average.

"Anecdotal evidence showed that demand resilience supported pricing power," the PMI report noted. But this demand resilience will be put to test sooner than later as downside risks linger with muted urban consumption being a sticky issue.

"Of late, urban consumption has been flagging, and no dependable explanations are available about why wage/income growth has decelerated—it has dropped steadily from 22% year-on-year (y-o-y) for Q4FY23 to 8% in Q2FY25 for aggregate wages of NSE500 companies," said an IIFL Securities Ltd report dated 2 January.