PMI: The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) fell to 58.1 in July from 58.3 in June. A PMI reading above 50 indicates expansion in production activity while a reading below 50 indicates contraction.
India’s manufacturing sector growth slowed marginally in July, driven by a slow pace of new contracts and production. On the other hand, cost pressures and strong demand led to the biggest increase in selling prices since October 2013, according to a monthly survey released on Thursday.
The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) fell to 58.1 in July from 58.3 in June. A PMI reading above 50 indicates expansion in production activity while a reading below 50 indicates contraction.
Experts said – this small decline is not a cause for concern
HSBC Chief India Economist Pranjul Bhandari said, “India’s core manufacturing PMI expansion slowed marginally in July, but this small decline is not a cause for concern as most components remained strong.”
Indian manufacturers reported substantial growth in new contracts despite the slowdown from June. There is also news of strong demand from customers located in Asia, Europe, North America and West Asia. Indian manufacturers experienced strong growth in international sales in July.
Surge in demand put pressure on prices
According to the survey, the overall rate of expansion was remarkable and the second strongest in 13 years. On the price front, surge in demand also put pressure on prices. The cost of raw materials increased at the fastest pace in nearly two years, which contributed to the fastest increase in selling prices since October 2013.
The HSBC India Manufacturing PMI is compiled by S&P Global based on responses to questionnaires sent to purchasing managers at a group of about 400 companies.
