India's economic activity remained strong in July 2024, with the composite Purchasing Managers' Index (PMI) at 60.7. Although slightly down from June's 60.9, this figure reflects a healthy and expanding economy, according to an Anand Rathi report.

The Services PMI held steady at 60.3, maintaining a position above the 60-mark for seven consecutive months. This sustained performance is driven by strong demand, increased technology investments, and new business gains. The optimistic outlook for future output has also contributed to one of the highest recruitment increases within the sector.

In the manufacturing sector, the PMI recorded at 58.1 indicates robust growth, fuelled by strong demand and a rise in international sales. Producers increased their stock levels sharply and managed to preserve their margins by raising selling prices despite rising input costs. Hiring continued at a high rate, though the pace was slightly slower than in June 2024.

Globally, the manufacturing outlook is less favourable. The G-20 Manufacturing PMI fell below the 50-mark for the fourth consecutive month, signalling a contraction. The JPMorgan Global Manufacturing PMI also showed a slowdown due to weaker growth in the US and China, on-going downturns in the Eurozone, and Japan's entry into contraction. Issues such as declining new orders and extended vendor lead times have been linked to supply-chain disruptions.

Despite these global challenges, India's manufacturing sector outperformed, expanding at the fastest rate among the surveyed countries. This resilience, coupled with strong domestic demand and favourable economic conditions, is expected to support continued growth in the coming months.

Additionally, inflation has reached an eleven-and-a-half-year high, and rising input costs are putting pressure on businesses. However, improved weather conditions and increased government expenditure are anticipated to bolster domestic economic activity.

In summary, while global manufacturing faces headwinds, India’s economic sectors, particularly manufacturing and services, continue to demonstrate significant growth and resilience.

(FPJ)