 "manufacturing")
Representative Picture: July manufacturing PMI came below the flash estimate of 58.5 for the month.
Growth in the Indian manufacturing sector slowed in July, as the headline Purchasing Managers Index (PMI) figure released by HSBC on Thursday fell to 58.1 from 58.3 in June. The slowdown in the sector was attributed to slightly softer increases in new orders and output.
However, international sales expanded at the fastest pace in over 13 years, while job creation remained robust, and selling prices saw the steepest increase since October 2013.
“Buoyant demand conditions created a ripple effect across the manufacturing industry, mainly through a substantial upturn in new work intakes. Despite slowing since June, the pace of sales growth was sharp in the context of historical data,” noted the survey by the private agency.
A figure above 50 in the index denotes expansion, while one below signifies contraction.
Pranjul Bhandari, chief India economist at HSBC, stated that although India’s headline manufacturing PMI showed a marginal slowdown in the pace of expansion in July, with most components remaining at robust levels, the small drop is no cause for concern.
“New export orders remain a bright spot, rising by 1 point to the second-highest level since early 2011. The continuous increase in the output price index, driven by input and labour cost pressure, may signal further inflationary pressure in the economy,” she added.
The survey also noted that production volumes were raised substantially at the start of the second fiscal quarter, even as the rate of growth eased from June. Nevertheless, the respective index was nearly six points above the average seen since the survey began in March 2005.
“With demand conditions remaining favourable and new orders coming in, goods producers purchased additional inputs in July. The rate of expansion was sharp, as more than a quarter of panellists increased their buying levels. In turn, strong input demand drove cost inflation higher. Manufacturers reported paying more for coal, leather, packaging, paper, rubber, and steel,” the survey highlighted.
On the job creation front, the survey noted that companies continued to hire extra staff in July, with offers of both permanent and short-term contracts highlighted by anecdotal evidence.
“The latest increase in employment was softer than in June, though still one of the strongest in the survey’s history. Yet, while 7 per cent of panellists noted job creation, 92 per cent reported no change in headcount,” the survey reported.
|
January 2023 |
55.4 |
|
February |
55.3 |
|
March |
56.4 |
|
April |
57.2 |
|
May |
58.7 |
|
June |
57.8 |
|
July |
57.7 |
|
August |
58.6 |
|
September |
57.5 |
|
October |
55.5 |
|
November |
56 |
|
December |
54.9 |
|
January 2024 |
56.5 |
|
Februray |
56.9 |
|
March |
59.1 |
|
April |
58.8 |
|
May |
57.5 |
|
June |
58.3 |
|
July |
58.1 |
|
Source: HSBC |
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First Published: Aug 01 2024 | 11:56 AM IST
