India’s Manufacturing Sector Hits 16-Month High in July

New Delhi, Aug 1 (KNN) India’s manufacturing activity surged to a 16-month high in July, driven by strong growth in production and new orders, according to the HSBC India Manufacturing Purchasing Managers’ Index (PMI) by S&P Global.

The PMI rose to 59.1 in July, up from 58.4 in June, marking the highest level since March 2023. A PMI above 50 indicates expansion.

The robust performance was supported by a sharp rise in new orders and improved demand conditions. Many firms credited successful marketing efforts for the surge, with overall sales rising at the fastest pace in nearly five years. As a result, production saw its strongest growth in 15 months.

Despite these gains, business confidence dropped to a three-year low due to growing concerns about competition and inflation. “Input and output prices remained elevated in July, and firms were cautious about the future,” said Pranjul Bhandari, chief India economist at HSBC.

Employment growth also slowed, with job creation hitting its weakest point since November 2024. Companies increased their purchases of inputs, though inventory levels of finished goods declined as firms continued to meet demand from existing stock.

The survey highlighted a slight intensification of cost pressures, though they remained modest by historical standards. Selling prices rose at a rate higher than the long-run average.

Global tensions also played a role in business sentiment. The escalation of conflict between Israel and Iran in June kept international markets volatile, and while a US-brokered ceasefire brought temporary relief, uncertainty lingered.

The PMI survey covers 400 manufacturers and serves as a key indicator of the country’s economic health, reflecting trends in output, new orders, employment, and prices.

(KNN Bureau)