- Monday, February 24, 2025
By: Shubham Ghosh
INDIA’S economic sector was in for a relief as factory activities bounced back in July, thanks to a surge in demand both at home and abroad, prompting companies to generate employment for the first time since the onset of the Covid-19 pandemic, a private sector survey on Monday (2) showed.
The Manufacturing Purchasing Managers’ Index, compiled by the UK-based HIS Markit, rose from 48.1 in June to 55.3 in July, well above 50-level separating growth from contraction, Reuters reported.
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“Output rose at a robust pace, with over one-third of companies noting a monthly expansion in production, amid a rebound in new business and the easing of some local COVID-19 restrictions,” Pollyanna De Lima, economics associate director at IHS Markit, was quoted as saying by the media outlet.
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While India was hit by a devastating second wave of the Covid pandemic in April and May, the plummeting case numbers have allowed many restrictions to be lifted, giving the economic sector to breathe.
While the country is still reporting more than 40,000 cases daily, yet the economic re-opening boosted the demand and sales, resulting in steady output expansion.
Also, new export orders went up at the fastest rate seen since April.
Employment went up for the first time since March 2020, ending a chain of job shedding that lasted 15 months. The pace of recruitment was still a moderate one, suggesting that a job crisis is still around.
Growth in India’s economy could lose momentum with new Covid variants posing risks and inflation expected to rise, a recent Reuters poll said. The input costs have been pushed up by a lack of availability of raw material and higher freight fees, though the pace was at a seven-month low.
Output charges, on the other hand, rose only slightly, meaning the companies absorbed the extra cost burden to boost sales and stay competitive.
“With firms’ cost burdens continuing to rise, however, and signs of spare capacity still evident, it’s too early to say that such a trend will be sustained in coming months,” De Lima said.
