India Manufacturing Growth Weakest Since August 2021

(RTTNews) - India's manufacturing activity expanded at the weakest pace in nearly five years, though the growth remained strong overall amid a sustained rise in new orders, final survey data from S&P Global showed on Monday.

The HSBC manufacturing purchasing managers' index dropped to 53.5 in July from 54.2 in June. The flash score was 53.9. Nonetheless, a reading above 50 indicates expansion in the sector.

New orders grew at the second-weakest in over four years due to challenging market conditions and reduced client interest for key items. The overall growth was driven by advertising and demand resilience.

Meanwhile, export orders logged a marked and accelerated growth, led by more demand from Canada, Egypt, Indonesia, Kenya, Nepal, South Africa, Thailand and the UAE.

Consequently, firms raised production volumes, though the pace of growth was among the softest since mid-2022. There were also slowdowns in growth of input purchasing and employment, with the latter showing the slowest in the current 29-month sequence of increase.

Although there was an encouraging sign that supply chain delays are continuing to unwind, doubts arise about how long these improvements will prevail amid renewed tensions in the Middle East.

On the price front, input price inflation eased to a 5-month low in July, and selling prices increased moderately.

Looking ahead, business sentiment strengthened as firms signalled a positive outlook for demand, infrastructure projects and new client enquiries.