New Delhi, August 3: India’s manufacturing sector remains robust, with the Purchasing Managers’ Index (PMI) recorded at 53.5 in July. This figure, however, reflects a slight decline from June’s 54.2. The data was released on Monday as part of the HSBC India Manufacturing PMI survey.
According to the PMI data compiled by S&P Global, Indian manufacturers continue to benefit from strong demand, with new orders contributing to output growth. Nonetheless, growth has slowed in certain areas, including total sales, input purchases, and employment.
A PMI reading above 50 indicates expansion in the sector.
A positive aspect of the PMI survey was the significant increase in new export orders. Additionally, there was a slight recovery in business expectations. Operating costs have risen, particularly in transportation, but the overall rate of cost increases has dropped to a five-month low. This has led to a modest rise in output charges.
Pranjul Bhandari, Chief India Economist at HSBC, noted, “In July, the index for suppliers’ delivery times increased, indicating a positive sign that delays in the supply chain are decreasing. However, renewed tensions in the Middle East have raised concerns about the sustainability of these improvements. In response, manufacturers are rebuilding buffers, leading to an increase in both input and finished goods inventories, suggesting that companies are securing supplies and mitigating risks of potential disruptions.”
She further stated that there is strength in output and new export orders, signaling robust demand, especially from foreign markets. In July, price pressures shifted, with a decrease in input cost inflation, while output prices saw an increase, indicating that companies are once again passing on the burden of rising costs to customers to protect their margins.
The survey also highlighted that Indian manufacturing companies have seen an increase in export orders from Canada, Egypt, Indonesia, Kenya, Nepal, South Africa, Thailand, and the UAE.
Leave a Comment