India's manufacturing PMI eases to 53.5 in July, growth moderates

India's manufacturing sector remained in expansion mode in July, supported by resilient domestic demand and stronger export orders, although the pace of growth moderated from the previous month, according to the HSBC India Manufacturing Purchasing Managers' Index (PMI) released on Monday.According to recent data,the HSBC India Manufacturing PMI eased to 53.5 in July from 54.2 in June, but remained above the 50-mark that separates expansion from contraction, indicating continued improvement in manufacturing activity.
The survey showed sustained growth in output and new orders, driven by advertising initiatives and steady domestic demand. However, some manufacturers reported softer client interest and challenging market conditions for certain products.
A notable feature of the July survey was the acceleration in export orders, with firms reporting stronger demand from markets such as Canada, Egypt, Indonesia, Kenya, Nepal, South Africa, Thailand and the UAE.Production levels continued to rise during the month, led by intermediate and capital goods manufacturers, while the consumer goods segment recorded relatively slower growth.
Commenting on the survey, HSBC Chief India Economist Pranjul Bhandari said improving supplier delivery times reflected further easing of supply-chain bottlenecks, although geopolitical developments continued to pose potential risks.She noted that output and new export orders strengthened during the month, highlighting resilient demand, particularly from overseas markets. While input cost inflation moderated, manufacturers increased output prices at a faster pace to safeguard profit margins.
The survey also indicated that manufacturers continued to rebuild inventories as supply-chain conditions improved. Input delivery times shortened at one of the fastest rates recorded by the survey, enabling firms to increase purchases, while stocks of finished goods registered their sharpest rise in more than 11 years.Despite the continued expansion, employment growth slowed in July, with hiring increasing at the weakest pace in the current 29-month period of job creation. Meanwhile, input price inflation eased to a five-month low, indicating a moderation in cost pressures faced by manufacturers.

(Business Correspondent)