PMI mfg growth hits 7-month low

New orders and output also mirrored the headline trend, with some panellists citing fierce competition as a reason for slowdown. Business outlook for the year ahead moderated slightly in August, driven by competitive pressures and inflation concerns - Pranjul Bhandari, Chief India Economist at HSBC

Sluggish Growth

♦ New business rose in Q2/2024

♦ New export orders at weakest pace since Jan

♦ However, cost pressures eased in Aug

♦ Rise in input costs slowed sharply

♦ Manufacturers increased raw material buying

♦ As they keen on safety stocks

New Delhi: India’s manufacturing sector growth moderated in August as output and sales rose at slowest rates since January, while competitive pressures and inflation concerns hampered business confidence, a monthly survey said on Monday.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) stood at 57.5 in August, below July’s reading of 58.1, but above its long-run average of 54.0, signalling a substantial improvement in operating conditions. In PMI parlance, a print above 50 means expansion, while a score below 50 denotes contraction.

“The Indian manufacturing sector continued to expand in August, although the pace of expansion moderated slightly. New orders and output also mirrored the headline trend, with some panellists citing fierce competition as a reason for slowdown,” said Pranjul Bhandari, Chief India Economist at HSBC.

According to the survey, new business rose sharply through the second quarter of the fiscal year, but the pace of expansion eased to a seven-month low. New export orders, likewise, increased at the weakest pace since the start of the 2024 calendar year. On the prices front, goods producers benefited from a moderation in cost pressures during August.