New Delhi — India’s manufacturing sector continued to expand in August, though growth slowed as weaker demand led companies to scale back purchasing activity and inventory accumulation, according to the latest HSBC India Manufacturing PMI data released Tuesday.
The seasonally adjusted Manufacturing Purchasing Managers’ Index fell to 52.8 in August, marking the third consecutive monthly decline. A reading above 50 indicates expansion.
Pranjul Bhandari, Chief India Economist at HSBC, said easing input cost pressures allowed manufacturers to raise selling prices at a slower pace.
Fewer than 7% of surveyed companies reported increasing their selling prices, with some businesses seeking to protect order volumes amid softer market conditions.
New business continued to grow at a strong pace, but the rate of expansion was the weakest in five years. Survey participants cited challenging market conditions and subdued demand for certain products.
Demand weakened in two of the three industrial categories tracked by the survey, while consumer goods remained comparatively resilient.
Export orders also increased in August, with companies reporting stronger demand from markets including Australia, Germany, mainland China, Spain, Thailand and the United States. However, growth in international orders slowed from July.
Production volumes continued to rise strongly during the month despite the moderation in demand.
Manufacturers also showed signs of greater caution in their inventory management. Stocks of finished goods increased for a second consecutive month as some companies reported sales falling short of expectations. The pace of inventory growth, however, was slower than in July.
Business sentiment improved despite the softer operating environment. About 16% of surveyed manufacturers said they expected output to rise over the next 12 months, while the remainder anticipated no change.
Confidence climbed to its highest level since May, though it remained below historical averages. (Source: IANS)
