India's Manufacturing Growth Reaches New Heights

India's manufacturing sector has reached a 16-month peak, with the Purchasing Managers' Index (PMI) climbing to 59.1 in July, up from 58.4 in June. This significant growth is attributed to a surge in new orders and output, marking the sector's strongest performance since March 2024.

Unprecedented Sales Growth

The survey highlighted an unprecedented growth in sales, nearly the highest in five years, with production levels hitting a 15-month high in July. Despite these gains, business confidence among manufacturers has dipped to its lowest in three years, primarily due to concerns over competition and inflation.

Challenges Ahead

Input and output prices remained elevated in July, with costs rising faster than in June. Key materials such as aluminium, leather, rubber, and steel saw price increases. However, strong demand allowed manufacturers to adjust their prices upwards.

Workforce Expansion Slows

The second fiscal quarter saw continued workforce expansion, though at the slowest rate in eight months. A majority of respondents (93%) felt their current workforce levels were adequate, with only slight increases in pending work volumes noted.

Conducted by S&P Global, the HSBC India Manufacturing PMI survey gathers data from approximately 400 manufacturing purchasing managers, providing a comprehensive overview of the sector's health.