India's manufacturing sector growth eased in the month of July, amid slightly softer increases in new orders and output. According to the survey report, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) eased to 58.1 in July 2024 as against 58.3 in June 2024. However, the latest reading was above the series long-run average and one of the highest seen in recent years.
The report further noted that 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. Production volumes were raised substantially at the start of the second fiscal quarter. The rate of growth eased from June, but the respective index was nevertheless nearly six points above the average seen since the survey began in March 2005.
On the price front, strong input demand drove cost inflation higher. The overall rate of increase was marked and among the fastest in just under two years. Indian goods producers sought to protect margins from cost increases by raising selling prices. Further, Indian manufacturers experienced a robust increase in international sales during July, amid strengthening demand from clients based in Asia, Europe, North America and the Middle East.
As per the report, companies continued to take on extra staff in July, with offers of both permanent and short-term contracts. The latest increase in employment was softer than in June, though one of the strongest in the survey history. Finally, the overall level of positive sentiment towards the year-ahead outlook for production was broadly unchanged since June. Growth is expected to be supported by marketing efforts and new client enquiries.
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