India's manufacturing sector growth hits 17-year high in August
What's the story
India's manufacturing sector witnessed significant growth in August, with the HSBC India Manufacturing Purchasing Managers' Index (PMI) hitting a high of 59.3, the highest since February 2008. The surge was driven by strong demand and an increase in production, despite rising inflationary pressures. The PMI is a key indicator of economic health, with readings above 50 indicating growth and below indicating contraction.
Economic activity
Strong demand and effective marketing strategies drive growth
The PMI survey showed that new orders continued to grow robustly in August, maintaining the rapid pace seen in July. This was the fastest expansion in nearly five years. Companies attributed this sustained growth to strong demand and effective marketing strategies. Despite rising inflationary pressures, firms increased their workforce for the 18th consecutive month, although at a slower pace than before.
Market dynamics
Business confidence improves despite US tariffs clouding growth outlook
While new export orders grew at a slower pace in August, manufacturers reported securing new work from clients in Asia, Europe, the Middle East, and the US. Despite the moderation in hiring and softer export orders growth, business confidence among manufacturers improved in August. This was a recovery from July's three-year low and was supported by demand despite US tariffs clouding the growth outlook.