Biz confidence fell to 3-year low as concerns over competition, inflation rise

Manufacturing sector conditions in India continued to strengthen in July, with the HSBC PMI climbing to a 16-month high due to faster increases in new orders, output and stocks of purchases, according to a survey  released by S&P Global on Friday.

Firms bought extra inputs to broadly the same extent as in June, however, whilst job creation receded to the weakest since November 2024. Meanwhile, business confidence retreated to its lowest level in three years.

Cost pressures intensified, though remained negligible by historical standards, while the latest increase in selling prices was stronger than the long-run series average.

The seasonally adjusted PMI–a single-figure indicator of sector performance–signalled the strongest improvement in the health of the sector since March 2024.

“India recorded a 59.1 manufacturing PMI in July, up from 58.4 during the prior month. This marked a 16-month high for the manufacturing sector, which benefited from strong growth in new orders and output. However, business confidence fell to its lowest level in three years due to concerns over competition and inflation. Indeed, input and output prices in India’s manufacturing sector both remained elevated during July. Amid softening business confidence, Indian manufacturers hired extra staff at the slowest rate since November 2024,” Pranjul Bhandari, Chief India Economist at HSBC, said.