India's factory growth at five-year low in August on weakening demand, PMI shows

Factory growth in India slipped to a five-year low in August, with weak demand weighing on activity, according to a survey. Employment in the sector also contracted, marking the first decline in 30 months, although the drop was small. The HSBC India manufacturing gauge, compiled by S&P Global, eased to 52.8 from 53.5 in July, a touch below its preliminary reading of 52.9.

Readings above 50 signal expansion, so the latest figure still points to growth in activity. Export orders continued to rise, although international demand expanded more slowly than in July. New orders grew at their weakest rate since August 2021, with firms citing difficult market conditions and soft sales of some goods.

Cost pressures lessened, as input price inflation dropped to its lowest level in six months. Firms raised their selling prices more modestly, with output price inflation at a 45-month low and below its long-run average. Business confidence edged up to its highest level since May, though sentiment remains weak compared with past norms.