India’s June Manufacturing Growth Slows to Near 4-Year Low As Demand Cools
As per the survey, seasonally-adjusted HSBC India manufacturing purchasing managers’ index (PMI) fell from 55.0 in May to 54.2 in June, pointing to the second-weakest improvement in the health of the sector since mid-2022. In the PMI parlance, a print above 50 means expansion, while a score below 50 denotes contraction.
New Delhi: India’s manufacturing sector expanded at its second-slowest pace in four years in June as weaker domestic and overseas demand weighed on production, hiring and business confidence, but easing cost pressures provided some relief to the sector, a private survey showed on Wednesday.
As per the survey, seasonally-adjusted HSBC India manufacturing purchasing managers’ index (PMI) fell from 55.0 in May to 54.2 in June, pointing to the second-weakest improvement in the health of the sector since mid-2022. In the PMI parlance, a print above 50 means expansion, while a score below 50 denotes contraction.
Commenting on the survey, Pranjul Bhandari, chief India economist at HSBC said that India’s manufacturing PMI eased to 54.2 in June from 55.0 in May, signalling continued expansion but at a slower pace. “The moderation suggests demand has cooled slightly after the earlier surge linked to the Middle East conflict. The growth slowed across output, new orders, export orders and employment, with international sales recording their weakest increase since March 2023,” Bhandari said.
As per the survey, several firms reported an improvement in demand conditions, but others noted subdued client appetite for their products and fierce market competition. “Overseas demand for Indian goods continued to improve in June, but the pace of growth was modest and the weakest in 39 months amid reports of subdued sales to some European markets,” the survey said.
On the price front, the survey pointed out that with demand growth fading, goods producers became more reluctant to lift their fees. Output charges rose to a moderate degree that was the least pronounced in three months. “Both the input and output price indices declined, pointing to softer inflation pressures as geopolitical disruptions begin receding,” Bhandari said.
On the employment front, the survey said that stable workloads and a lack of demand pressure led businesses to pause or scale back hiring. “A general absence of capacity pressures restricted recruitment activity at the end of the first fiscal quarter. Backlogs of work were broadly unchanged, and employment expanded at the weakest rate in 2026 so far,” the survey noted.
