As the increase in output, new orders and employment was at a slower pace, the manufacturing activity for the month of July moderated. The Nikkei India Manufacturing Purchasing Managers Index (PMI) which is a metric for the manufacturing activity pace of the country weakened to 52.3 for the previous month as against 53.1 in June. The measure above 50 separates expansion from contraction.

The economist at IHS said, "The recent improvement in Indian manufacturing conditions lost some impetus in July, with softer rises in output, new orders and employment". It is to be noted that the manufacturing index remained well above the 50 mark for the 12th straight month.

The economist added, "We must not lose sight of the fact that the sector continued on a steady expansionary path, as production and new business rose at marked rates. Moreover, July survey data pointed to strong demand from both domestic and international sources".

It is for the ninth continuous month that the country has been witness to increasing orders from domestic and international front. Also, business sentiment was uplifted to a three-month high but remained well below the historical average as there are concerns that going ahead there could be slowdown seen in the sector at large.

On the employment front, sustained growth in respect of new orders and output propelled companies to increase their staffing level for the fourth consecutive month in July.

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