India's manufacturing sector activity eases in June, but output remained in growth territory: PMI

New Delhi, July 3

Manufacturing sector activities in India moderated in June from a 31-month high in May, but output remained in the growth territory, as new work orders expanded sharply amid favourable demand conditions, a monthly survey said on Monday.

The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) fell from 58.7 in May to 57.8 in June.

Despite the fall, the headline figure pointed to a considerable improvement in operating conditions, the survey said, adding that the demand strength positively impacted several other measures such as sales, production, stock building and employment.

The June PMI data pointed to an improvement in overall operating conditions for the 24th straight month. In PMI parlance, a print above 50 means expansion while a score below 50 indicates contraction.

“June’s PMI results again showed robust demand for Indian-made products, both in the domestic and international markets.

“Positive client interest continued to support the manufacturing industry, driving growth of output, employment, quantities of purchases and input stocks,” said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.

Demand strength, new client enquiries and marketing efforts underpinned optimistic forecasts towards growth prospects. According to the survey, the overall level of business confidence rose to a six-month high.

On the employment front, goods producers sought to expand capacities by taking on additional workers in June. Employment rose at a moderate pace that was broadly similar to May.

Goods producers resorted to additional inputs buying. The increase was substantial and the second-strongest in over 12 years on positive demand trends and rising output needs.

On the prices front, positive demand dynamics and greater labour costs pushed charge inflation to a 13-month high.