Mumbai
India's manufacturing sector grew at its fastest pace in 16 months in July, driven by a sharp rise in output and new orders amid strong demand, according to a monthly survey released on Friday.
The HSBC India Manufacturing Purchasing Managers’ Index (PMI) rose to 59.1 in July from 58.4 in June, marking the strongest performance since March 2024. In PMI terms, a reading above 50 signals expansion, while below 50 indicates contraction.
“India’s July PMI rose to 59.1 from 58.4 in June, a 16-month high backed by robust gains in new orders and output,” said Pranjul Bhandari, Chief India Economist at HSBC.
Sales grew at their fastest pace in nearly five years, with production rising to a 15-month high—outpacing the long-term average. Manufacturers also remained optimistic about future output, although overall confidence dropped to a three-year low due to inflation and rising competition.
“Business confidence dipped to its lowest in three years. Input and output prices stayed elevated, driven by rising costs of aluminium, leather, rubber, and steel,” Bhandari added.
Hiring continued in July but at the slowest pace in eight months. Around 93% of firms said current staffing levels were adequate, with only marginal increases in backlogs of work. Despite cost pressures, favourable demand allowed many companies to raise their selling prices. The PMI survey, compiled by S&P Global, is based on responses from around 400 manufacturing firms across India.