An important and worrying news has come out on the Indian economy front. The pace of the country’s manufacturing sector has seen a slowdown in the month of July. According to the latest data, the country’s Manufacturing Purchasing Managers’ Index (Manufacturing PMI) has fallen to 53.5 in July. This figure is the lowest level of factory activities in the last 5 years i.e. in almost 60 months. However, the index remaining above 50 shows that the sector is still expanding instead of declining, but its pace has slowed down considerably.
Main reasons for the slowdown and its impact on the market
Economists believe that this impact on manufacturing activity is due to a slowdown in demand for new orders, both domestically and globally. PMI data indicated a slowdown in June, which became more pronounced in July. Rising input costs and global market uncertainties have also impacted corporate production.