Indian Manufacturers Report Slower Growth in Business and Output

18 Sep, 2024

Indian Manufacturers Report Slower Growth in Business and Output

India’s manufacturing sector growth slowed in August, with output and sales increasing at their slowest rates since January. The HSBC India Manufacturing Purchasing Managers’ Index (PMI) registered at 57.5 for August, down from July’s 58.1 but still above the long-term average of 54.0. This indicates a continued expansion in the sector but at a moderated pace.

New business and output mirrored the overall trend, with competition and inflation concerns impacting business confidence. New orders saw their slowest growth in seven months, and export orders increased at the weakest rate since early 2024. Despite this, manufacturers benefitted from a decrease in cost pressures, with slower rises in input costs and output prices contributing to improved margins.

Job creation also softened as some firms reduced their workforce, though overall employment growth remained strong historically. Business confidence fell to its lowest level since April 2023 due to competitive and inflationary pressures. The Indian economy experienced a deceleration in growth to a 15-month low of 6.7% for April-June 2024, influenced by weak agriculture and services performance.

Overall, while the manufacturing sector continues to expand, the pace of growth has moderated amidst various economic challenges.