Manufacturing PMI eases for second month, dips to 57.7 in July, ETCFO

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<p>Manufacturing PMI eases for second month, dips to 57.7 in July</p>
Manufacturing PMI eases for second month, dips to 57.7 in July

India’s manufacturing sector displayed resilience even as activity moderated in July for the second straight month owing to moderation in output and new orders, data showed on Tuesday.

The Manufacturing Purchasing Managers’ Index, compiled by S&P Global, dipped to 57.7 last month from June’s 57.8.

The manufacturing PMI has now spent 25 consecutive months above the key level of 50 that separates expansion and contraction in activity.

While new orders remained robust, output growth moderated to a three-month low. The rate of input cost inflation accelerated to a nine-month high in July. However, it remained softer than the series average. Where input prices increased, panellists reported higher costs for raw materials, in particular cotton, the report said.

“The Indian manufacturing sector showed little sign of losing growth momentum in July as production lines continued to motor on the back of strong new order growth,” said Andrew Harker, Economics Director at S&P Global Market Intelligence.

“All in all, the Indian manufacturing sector has maintained its position as one of the star performers globally, bucking the trend of demand weakness seen in other parts of the world,” Harker added.

Output has increased continuously on a monthly basis since July 2021. The latest rise was substantial, albeit the softest in three months, the survey showed.

Foreign demand stoked exports at the fastest pace since November. Firms expected activity to stay elevated over the coming year and the future output sub-index remained high at 65.3, albeit slightly lower than in June.

“Pressure continued to come on capacity, prompting firms to expand employment solidly again, a trend that is likely to continue in the months ahead should demand remain strong,” added Harker.

Firms responded to greater workloads by taking on extra staff. The solid pace of job creation was broadly in line with those seen in May and June.

Efforts to satisfy new orders led firms to dip into inventory holdings again in July. Stocks of finished goods have now decreased on a monthly basis throughout the past six years, although the latest fall was only slight, the report said.

  • Published On Aug 1, 2023 at 11:55 AM IST

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