India PMI August 2023

India: Business activity remains strong in August

The S&P Global Composite Purchasing Managers’ Index (PMI) came in at 60.9 in August, down from July’s 61.9. However, the index remained at one of the highest levels in 12 years, signaling a strong, albeit softer, improvement in private sector operating conditions from the previous month. The July and August data further suggest that GDP growth should once again be one of the highest in Asia in the second quarter of FY 2023 (July–September).

The Manufacturing PMI clocked in at 58.6 in August, up from July’s 57.7. Lastly, the Services PMI decreased to 60.1 in August (July: 62.3). The gap between the two sectors therefore narrowed in August, suggesting broad swathes of the economy are firing on all cylinders.

In both sectors, new orders and output continued to soar at some of the speediest rates in over a decade. Activity was supported by foreign demand, which rose sharply in both sectors. This strong activity led firms to further beef up their workforce. Finally, business sentiment in both sectors remained historically elevated.

S&P Global’s Pollyanna De Lima said:

“Favourable demand trends also led to the joint-fastest increase in prices charged for Indian services in over six years, which may prompt attention from policymakers and potentially delay cuts to the benchmark repo rate.”

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