India’s manufacturing Purchasing Managers’ Index (PMI) for June registered 54.2, showing sustained growth in the sector. The PMI figure remained above 50, denoting expansion in operating conditions within manufacturing. Despite a slight slowdown in growth compared to the previous month, the data revealed positive trends in new orders and output.
The report highlighted a mixed scenario among manufacturers, with some experiencing increased demand while others faced challenges due to subdued client interest and market competition. Export demand also maintained positivity during the month, although the growth rate moderated. Pranjul Bhandari, HSBC’s Chief India Economist, noted that the PMI signified ongoing expansion in manufacturing activity.
While the data indicated a cooling in demand post the Middle East conflict surge, various aspects such as output, new orders, export orders, and employment witnessed a slowdown. Input costs and output prices also saw a decline, signaling reduced inflationary pressures amidst geopolitical calm. The PMI report further mentioned a moderation in purchasing activity, leading to a slower accumulation of input inventories, while finished goods inventories decreased as firms adjusted production to match current demand.
Despite the overall growth, employment continued to rise in June, albeit at a slower pace. Earlier data from HSBC Flash PMI in June had shown a slight easing in India’s private sector activity due to geopolitical tensions, although new orders continued to expand. Manufacturing output growth softened as inventory-building momentum waned, resulting in a more moderate increase in output and employment levels.
