India's June Manufacturing PMI Falls to 54.2, Second-Lowest in Nearly Four Years
N.R. Finch
India's June manufacturing PMI dropped to 54.2, the second-lowest since mid-2022, as new orders and exports slowed in tandem — weak European demand was the main drag.
What does 54.2 actually tell us?
The PMI — a monthly survey gauging manufacturing health — fell from 55.0 in May to 54.2, also below the flash estimate of 54.5.
The 50 mark separates expansion from contraction; the current reading is still in growth territory and matches the long-run average.
This means → Indian manufacturing is still expanding, but the pace is visibly slowing — this is the second-lowest reading since mid-2022, better only than March.
Orders are cooling — where is the drag?
New-order growth was the second-slowest since June 2022, right after May's three-month high — the rebound did not hold.
Export orders were weaker still: international sales growth fell to a 39-month low, with firms widely citing soft European demand.
In plain terms = domestic orders are slowing, but overseas orders are slowing faster — and the problem is mainly Europe.
How is weaker demand feeding through to prices and hiring?
Output-price inflation was the slowest in three months; 93% of firms held prices unchanged — demand is not strong enough to support increases.
Input-cost inflation eased to a four-month low, though chemicals, metals, petroleum products and plastics remain on firms' watch lists.
Hiring growth was the slowest this year; 97% of firms kept headcount steady, saying capacity is already sufficient for current demand.
What matters for the second half?
Business confidence fell to a five-month low; uncertainty over demand outlook and market conditions is the chief concern.
Output expansion slowed to the second-lowest in nearly four years, with capital goods — equipment and machinery used in production — the clear drag.
This means → whether export orders can stabilise before European demand recovers is the key variable for India's manufacturing momentum in the second half.
Content is for reference only, not financial advice.