India Manufacturing PMI Contracts Further In July

India's manufacturing output in July contracted at a faster pace than in June. The IHS Markit purchasing managers' index (PMI) for manufacturing declined fell slightly in July to 46 from 47.2 in June. A figure of above 50 indicates expansion, while a sub-50 print signals contraction. Subdued demand was evidenced by marked decrease in new orders placed with manufacturers in July. Similar to the trend for output, the pace of decline accelerated from June, but remained slower than at the height of the current crisis. However, despite current operating conditions continuing to deteriorate, manufacturers were increasingly optimistic regarding future activity. Sentiment towards the 12-month business outlook improved for the second month in a row to reach a five-month high. The degree of positivity was still well below the historical average.

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