Manufacturing activity in July dipped slightly as compared to the previous month while maintaining a strong growth momentum driven by a sharp uptick in new export orders, a private survey on Tuesday said.
S&P Global said that India’s purchasing managers’ index (PMI) for manufacturing fell to 57.7 in July, down from 57.8 in June, and 58.7 in May.
A figure of 50 separates expansion from contraction.
Higher inflationary pressures remained a key challenge despite easing in recent months, it 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.
“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,” Harker said.
“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,” he added.
While domestic manufacturing maintained a strong momentum, growth in new export business picked up to the fastest since last November 2022.
“With new orders up sharply again, manufacturers expanded production accordingly. Output has increased continuously on a monthly basis since July 2021,” the report said. “The solid pace of job creation was broadly in line with those seen in May and June. This expansion in capacity was not sufficient to prevent a further build-up in backlogs of work, however, given the strength of the rise in new orders,” it added.
S&P panellists cited higher costs for cotton and other raw materials.
Source: Live Mint