Manufacturing sector growth slows down for second consecutive month, economy in better condition due to improvement in demand

India's manufacturing sector activity contracted for the second month in a row in July. The rate of output expansion and new orders slowed slightly in July, according to a monthly survey.
The S&P Global India Manufacturing Purchasing Managers' Index (PMI) declined from 57.8 in June to 57.7 in July.
According to the survey, despite the decline, the Indian manufacturing sector maintained the growth momentum due to strong demand. The PMI data for July reflected an improvement in overall operating conditions for the 25th consecutive month. According to PMI data, a score above 50 means growth and a score below 50 indicates contraction.
Growth in the Indian manufacturing sector showed no signs of slowing in July as strong growth in new orders kept production lines running, said Andrew Harker, director of economics at S&P Global Market Intelligence.
According to the survey, the recovery in demand is widely reported and led to another significant expansion of new orders in the manufacturing sector. The growth in new export business has been the fastest since last November, according to the survey report.
Survey respondents noted an increase in new orders from customers in countries such as the US, Bangladesh, and Nepal.
On the inflation front, cost inflation pressures remained relatively low. Input cost inflation rose to a nine-month high in July. Panelists reported the high cost of raw materials, particularly cotton.
Higher raw material prices and rising labor costs forced companies to raise their selling prices, the survey reported, adding that inflation was solid, but fell to a three-month low.
The S&P Global India Manufacturing PMI is compiled from responses to a questionnaire sent by S&P Global to purchasing managers across a panel of approximately 400 manufacturers.
The panel is stratified by contribution to GDP, sector-wide, and by the size of the company workforce. The company started data collection in 2005.