Manufacturing PMI Hits 17-Year High as Demand Boosts Output, But Job Creation Slows
India’s private sector continues to show remarkable resilience, with business activity in both manufacturing and services remaining robust in July, despite persistent inflation and slowing employment growth.
According to today’s preliminary data from the HSBC Flash Purchasing Managers’ Index (PMI), India’s Composite PMI — which combines output from both sectors — came in at 60.7, marking the fourth consecutive month above the 60-point level. A PMI reading above 50 indicates expansion.
🔹 Manufacturing Momentum Surges
The standout performance came from the manufacturing sector, where the PMI rose to 59.2, its highest in over 17 years. Strong demand from both domestic and international markets drove factory output and new orders higher, offsetting rising input costs.
- Exports continued to grow at a fast pace
- Inventory levels improved, signaling supply chain stability
- Input cost inflation remains high, but manageable
🔹 Services Sector Holds Steady
India’s services industry also maintained a strong pace of expansion. Although the rate of new business growth was slightly slower compared to June, consumer demand and optimism over future activity helped keep momentum going.
🔹 Jobs Growth Slows, Optimism Cools
One area of concern was employment, which grew at the slowest rate in over a year. Many firms cited caution in hiring due to cost pressures and global uncertainties.
- Business confidence slipped to a 16-month low
- Hiring activity was modest in both manufacturing and services
- Inflation expectations remained elevated, keeping firms cautious
🔹 Outlook
Despite these headwinds, the data underscores the resilience of India’s private sector and its ability to navigate inflationary and external pressures. Economists expect the Reserve Bank of India to monitor these trends closely as it calibrates future policy decisions.
🛡️ Disclaimer
This is a developing economic story. Final PMI figures will be released at the end of the month and may provide additional clarity on growth patterns and inflation dynamics.
