New Delhi, Aug 3 (IANS): Subdued demand conditions on the back of Covid-19 outbreak continued to dent India's manufacturing sector output in the month of July.

Accordingly, the latest reading of seasonally adjusted IHS Markit India Manufacturing PMI index showed that firms responded by cutting both staff numbers and purchasing activity.

"However, despite the ongoing negative impact of the coronavirus disease (Covid-19), sentiment towards future activity improved for the second month running," IHS Markit said in a statement.

Consequently, the seasonally adjusted PMI reading fell to 46 in July from 47.2 in June "pointed to a marked deterioration in business conditions across the Indian manufacturing sector".

"The downturn was partially driven by a further contraction in output. Although far softer than recorded in April and May, the rate of reduction accelerated from June and was sharp overall. Anecdotal evidence indicated that firms pared back production in line with weaker demand conditions," the statement said.

"Subdued demand was evidenced by another marked decrease in new orders placed with manufacturers during 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."