India’s manufacturing sector continued to expand in July, supported by resilient domestic demand and stronger export orders, although the pace of growth moderated from the previous month. The HSBC India Manufacturing Purchasing Managers’ Index (PMI) stood at 53.5 in July, compared with 54.2 in June.
The latest reading remained above the 50-point threshold that separates expansion from contraction, indicating continued improvement in manufacturing activity.
According to HSBC, manufacturers recorded sustained growth in output and new orders during the month, driven by advertising initiatives and resilient demand. However, some firms also reported softer client interest and challenging market conditions for certain products.
A key highlight of the survey was the acceleration in export orders, with companies reporting stronger demand from markets including Canada, Egypt, Indonesia, Kenya, Nepal, South Africa, Thailand and the UAE.
Production levels also increased during the month, with intermediate and capital goods manufacturers registering stronger growth in output and new orders. In contrast, the consumer goods segment witnessed comparatively slower expansion.
Commenting on the survey, Pranjul Bhandari, Chief India Economist at HSBC, said improving supplier delivery times indicated a continued easing of supply-chain bottlenecks, although geopolitical developments remained a potential risk.
She said output and new export orders strengthened during the month, reflecting resilient demand, particularly from overseas markets. While input cost inflation moderated, firms raised output prices at a faster pace to protect profit margins.
The survey also showed that manufacturers continued to rebuild inventories as supply-chain conditions improved. Input delivery times shortened at one of the fastest rates recorded in the survey, allowing firms to increase purchases. Stocks of finished goods also rose, recording their sharpest increase in more than 11 years.
Despite continued expansion in manufacturing activity, employment growth moderated during July. Hiring increased at the slowest pace in the current 29-month period of job creation.
Cost pressures also eased during the month, with input price inflation declining to a five-month low, indicating some moderation in cost burdens faced by manufacturers.
-ANI
