As per S&P Global’s Purchasing Managers’ Index (PMI), India’s manufacturing activity grew in July. The country stood at a score of 56.4 in the index. In June, it was at a nine-month low of 53.9. Under the index, a reading above 50 indicates expansion in activity, and contraction in activity is denoted by a score below 50. This is India’s 13th consecutive 50-plus record for the manufacturing PMI.
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During July, faster economic growth and softening inflation led to a rise in manufacturing activity. The data shows output increased at the fastest pace since last November. However, there remained a slowdown in foreign orders.
Despite a rise in production activities, inflation seems to remain under control. Although the input prices rose, they increased the least in eleven months in July. Also, the prices charged by manufacturers for their goods increased the least in four months in July.
Notably, inflation rates were most acute in the capital goods segment. While the weakest rises were noted in the intermediate goods sub-sector. It is estimated that RBI’s Monetary Policy Committee (MPC) will raise the repo rate by at least 25 basis points to combat high inflation. On the hiring front, the situation seems gloomy as 98 % of firms chose to make no addition to their payrolls due to little pressure on operating capacity.
