BENGALURU, July 1 (Reuters) – India’s manufacturing sector expanded at its second-slowest pace in four years in June as cooling demand for goods dragged on output and hiring but easing cost pressures provided some relief, a survey showed.
• The HSBC India Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, fell to 54.2 in June from May’s 55.0 – slightly lower than a preliminary estimate of 54.5. Only March’s reading was weaker going back to mid-2022.
• Despite falling to the second-lowest since mid-2022, the June’s number was in line with the long-run series average. A PMI reading above 50.0 signals growth.
• New orders – a key measure of demand – rose at their second-weakest rate since June 2022 after hitting a three-month high in May. Export orders were notably softer as international sales grew at the weakest pace in 39 months with firms citing subdued demand from European clients.
• Output also expanded at the second-slowest rate since mid-2022 as capital goods dragged.
• As demand lost momentum firms were more reluctant to raise prices. Output charges rose at their slowest rate in three months and 93% of companies left fees unchanged from May. Input cost inflation eased to a four-month low though firms continued to flag higher prices for chemicals, metals, petroleum products and plastics.
• Hiring reflected the softer demand environment. Employment grew at its weakest pace this year and 97% of firms kept headcount unchanged citing adequate capacity.
• Concerns over demand and market conditions dampened business confidence to a five-month low.
(Reporting by Shaloo Shrivastava;Editing by Shri Navaratnam)
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