India's manufacturing sector growth rate slowed marginally in July, PMI data released

India's manufacturing sector growth rate slowed marginally in July. The reason for this was the slow pace of new contracts and production. On the other hand, due to cost pressure and strong demand, the highest increase in selling prices was recorded since October 2013. This information was revealed in a monthly survey released on Thursday.

The seasonally adjusted 'HSBC India Manufacturing Purchasing Managers Index' (PMI) declined to 58.1 in July from 58.3 in June. An index above 50 under PMI means expansion in production activities, while a figure below 50 indicates a decline.

Pranjul Bhandari, chief India economist at HSBC, said, "India's core manufacturing PMI showed a marginal slowdown in expansion in July, but this small decline is not a cause for concern as most components remained at strong levels."

Indian manufacturers reported substantial growth in new contracts despite a slowdown from June. Strong demand was also reported from customers based in Asia, Europe, North America, and West Asia. Indian manufacturers experienced strong growth in international sales in July.

According to the survey, the overall rate of expansion was remarkable and the second strongest in 13 years. On the price front, the surge in demand also put pressure on prices. The cost of raw materials increased at the fastest pace in nearly two years, contributing to the fastest increase in selling prices since October 2013.

The HSBC India Manufacturing PMI is compiled by S&P Global based on responses to questionnaires sent to purchasing managers at a group of about 400 companies.