India's manufacturing activities expanded at a robust pace throughout July to hit a 16-month high. The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index rose to 59.1 in July from 58.4 in the previous month.
The index is the single-figure indicator of sector performance. A reading above 50 indicates expansion while a reading below it indicates a contraction in the activity. In June, India's PMI hit a 14-month high.
The manufacturing activities remained robust in the previous month because of an increase in new orders, output, and stocks of purchases, the HSBC said in the report released on Friday.
New orders placed with the Indian producers increased in July as demand conditions improved due to successful marketing initiatives. Overall, sales increased at the fastest pace in close to five-years, the report said.
Meanwhile, new export orders increased to a lesser extend in July compared to in June. The expansion was nevertheless among the best seen in over 14 years, HSBC said.
Price pressure intensified despite remaining negligible by historical standards. The latest increase in selling prices was more than the long-run series average, the report said.
Buying levels rose at a marginally slower pace than in June despite goods producers sought to replenish their inventories by acquiring additional inputs, the HSBC report said.
Vendor performance also improved which supported another increase in stocks of purchases. Stock of purchases expanded to the greatest extent in 15 months. In July inventories of finished goods decreased further in July, with companies continuing to suggest that sales had been met from warehoused products.
"Amid softening business confidence, Indian manufacturers hired extra staff at the slowest rate since November 2024"Pranjul Bhandari, Chief India Economist at HSBC
Meanwhile, job creations declined to the lowest level since November 2024, the report said. Business confidence also hit the lowest level in three years due to concern over competition and inflation.
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