Manufacturing PMI Eases To Seven-Month Low Of 57.5 In August
New business rose sharply midway through the second fiscal quarter, but the pace of expansion eased to a seven-month low.
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The seasonally adjusted HSBC India Manufacturing PMI stood at 57.5 in August, below July's reading of 58.1, but above its long-run average of 54.0, signalling a substantial improvement in operating conditions.
New business rose sharply midway through the second fiscal quarter, but the pace of expansion eased to a seven-month low. Panel members attributed the increase to advertising, brand recognition and healthy demand trends. Competitive conditions reportedly dampened growth.
New export orders likewise increased at the weakest pace since the start of the 2024 calendar year. Yet, one in 10 firms noted an improvement in international sales, which they associated with stronger demand from Asia, Africa, Europe and the US. Although output continued to rise at a historically sharp pace, the rate of expansion moderated to the slowest since January.
Goods producers benefited from a moderation in cost pressures during August. Purchasing prices still rose, but did so to the weakest degree in five months. Firms that observed an increase remarked on greater leather, mineral and rubber costs. The rate of input buying growth was sharp and the strongest since April.
Not only did input inventories increase further in August, but also to one of the greatest extents seen in 19.5 years of data collection. Underlying data showed that a lack of pressure on supplier capacity facilitated manufacturers' stock-rebuilding efforts. Input lead times shortened for the sixth straight month in August.
Job creation softened midway through the second fiscal quarter as a few firms trimmed headcounts. Nevertheless, the overall rate of employment growth was solid in the context of historical data.
Despite the slowdown in cost pressures, there was a marked increase in prices charged for Indian goods in August. The rate of inflation was the second-fastest in close to 11 years. Firms reportedly shared additional cost burdens with their clients amid demand resilience.
Finally, competitive pressures and inflation concerns hampered business confidence in August. Panellists were at their least optimistic since April 2023.
