NEW DELHI: India’s manufacturing sector recorded its weakest growth in nearly five years in July, reflecting softer domestic demand and slower job creation despite continued expansion in factory activity.
The S&P Global HSBC India Manufacturing Purchasing Managers’ Index (PMI) fell to 53.5 in July from 54.2 in June, marking its lowest reading since August 2021. A PMI reading above 50 indicates expansion, although the latest figure points to slower growth.
According to the survey, new orders increased at the second-slowest pace in more than four years as subdued market conditions and weaker customer demand weighed on sales.
Export orders improved from June, growing at their fastest pace since April, but remained modest overall.
Manufacturing output continued to expand at a pace broadly similar to the previous month. Producers of intermediate and capital goods reported relatively stronger performance, while consumer goods manufacturers experienced weaker demand.
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Employment in the sector increased for a 29th consecutive month, but hiring growth slowed to its weakest pace during the entire expansion period, suggesting companies remained cautious about future demand.
The survey also showed that input cost inflation eased to a five-month low, although higher transportation costs continued to affect manufacturers. Businesses raised selling prices only modestly, limiting the impact on customers.
Despite the slowdown, business confidence improved slightly from June’s recent low. Manufacturers expressed optimism that stronger demand and ongoing infrastructure projects would support activity in the months ahead.
Economists said the latest data suggest India’s manufacturing sector remains in expansion territory, but growth has lost momentum amid softer demand conditions.
