PMI survey shows India's manufacturing activity growth hits three-month low of 57.5 in August

The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, stood at 57.5 in August 2024, below July's reading of 58.1 as well as a preliminary estimate of 57.9, but above its long-run average of 54.0, signalling a substantial improvement in operating conditions.

Official data showed on Friday (August 30) that growth in Asia's third-largest economy slowed to 6.7 percent last quarter from 7.8 percent as government spending fell.

Despite falling, India's PMI index beat its average and held above the 50-mark that separates growth from contraction, where it has been since July 2021, reports Reuters.

"The Indian manufacturing sector continued to expand in August, although the pace of expansion moderated slightly," HSBC's Chief India Economist Pranjul Bhandari said.

"New orders and output also mirrored the headline trend, with some panellists citing fierce competition as a reason for slowdown," Bhandari added.

The survey showed new business rose sharply through the second quarter of the fiscal year, but the pace of expansion eased to a seven-month low, while new export orders, likewise, increased at the weakest pace since the start of the 2024 calendar year.

Meanwhile, on the prices front, goods producers benefited from a moderation in cost pressures during August, as per the survey.

The HSBC India Manufacturing PMI, which is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers, showed India's gross domestic product (GDP) expanded 8.2 percent in the June quarter of 2023-24.