Manufacturing PMI: Indian Manufacturing One Of The Star Performers Globally
The manufacturing sector in India performed exceptionally well in July, showing strong growth and maintaining its position as one of the top performers globally.
This positive trend has been continuing for the past 25 months, with business conditions improving consistently.
The S&P Global India Manufacturing Purchasing Managers’ Index (PMI) for July was 57.7, which is slightly lower than June’s reading of 57.8 but still indicates a healthy state of the sector.
The growth in output and new orders remained strong, and companies responded by hiring more staff and increasing their purchasing activity.
Despite some inflationary pressures, the overall cost inflation remained relatively moderate. Export business also saw a significant increase, particularly to countries like the US, Bangladesh, and Nepal.
This surge in demand led to manufacturers expanding production and taking on more employees to meet the workload.
While the rising demand is a positive sign, it also led to a build-up of backlogs of work for manufacturers. To meet the increasing orders, firms used their existing inventory holdings and ramped up purchasing activity to build more inventories.
Suppliers also played a role in supporting manufacturers by speeding up deliveries, which helped in the efforts to build stocks.
However, the rate of input cost inflation increased to a nine-month high, primarily driven by higher raw material costs, especially for materials like cotton.
To compensate for the rising input costs and labor expenses, firms increased their selling prices, but the inflation rate eased slightly in July.
Looking ahead, manufacturers are optimistic about the future, expecting the demand to remain high and supporting projections for production growth in the coming year.
Customer response to recent new order deliveries has been positive, and confidence remains above the series average.
India’s manufacturing sector has been rising as a top performer, even amid the weak demand in other countries of the world.
India’s manufacturing sector is robusting growth. These positive signals are seen as encouraging signs for the country’s economy.