- India's manufacturing PMI slipped to 53.5 in July from 54.2, the lowest reading since August 2021 and below the long-run average; output growth fell to a near five-year low, dragged by weak demands, according to an S&P Global survey.
- A PMI above 50.0 signals expansion, but manufacturing output growth slowed for a third consecutive month, with exports and domestic demands subdued.
- Growth in new orders was the second-weakest in over four years; export orders rose at the fastest pace since April but remained modest after falling to a 39-month low in June.
- Consumer goods was a particular area of weakness in July, while intermediate and capital goods makers registered stronger rates of expansion; business sentiment strengthened from June's recent low.
- Input cost inflation eased to a five-month low in July even as transportation costs rose; Bhandari said input cost inflation moderated but output charge inflation accelerated, with firms passing through price increases to protect margins.
India's manufacturing PMI dropped to 53.5 in July, the lowest since August 2021, reflecting a slowdown in output growth for the third consecutive month.123456
The decline was attributed to weak demand and challenging market conditions, with new orders growing at their second-weakest rate in over four years.
Job creation in the sector also weakened, marking the slowest growth in 29 months.
Despite these challenges, supply-chain conditions improved, with input lead times shortening significantly.
However, he cautioned that “renewed tensions in the Middle East have raised fresh doubts about how durable these improvements will be.”
The survey indicated that while input cost inflation eased to a five-month low, output charge inflation accelerated, suggesting firms are passing on costs to protect margins.1213
“Bhandari said input cost inflation moderated but output charge inflation accelerated as firms passed through price increases to protect margins. New export orders rose at their fastest pace since April, with firms noting gains from Canada, Egypt, Indonesia, Kenya, Nepal, South Africa, Thailand and the UAE.”
Deccan Herald
