India's factory growth at five-year low in August on weakening demand, PMI shows

BENGALURU: India’s manufacturing sector expanded at its slowest pace in five years in August as demand remained soft, leading to job losses for the first time in more than two years, a survey showed.

The HSBC India Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, fell to 52.8 in August from 53.5 in July, slightly lower than a preliminary estimate of 52.9.

A PMI reading above 50.0 indicates growth in activity.

Asia’s third-largest economy grew 7.8% from a year earlier in the April-June quarter, exceeding a Reuters poll expectation of 7.1% driven by an investment boom and growth in the manufacturing sector.

However, growth is expected to slow to 6.6% in the current quarter according to the poll.

New orders rose at the slowest pace since August 2021, with firms pointing to challenging market conditions and weak demand for some products.

Export orders also grew, though the pace of international demand growth eased from July.

India’s July factory growth near five-year low on weaker demand, PMI shows

Output continued to expand but at its slowest pace in five years.

In a further sign of caution, factory headcount fell for the first time in 30 months, though the decline was only marginal.

Cost pressures eased, with input price inflation falling to a six-month low.

Firms limited increases in their selling prices as a result, with output charge inflation slowing to its weakest in 45 months and falling below its long-run trend.

Despite the broad slowdown, business confidence improved slightly and rose to its highest since May.

However, sentiment remained subdued by historical standards. ‑Reuters