In June, manufacturing in India grew at its second-fastest rate this year

While manufacturing
activity in India slowed in June from May’s 31-month high, output was still up
as new work orders surged due to strong demand. This was according to a survey
released on Monday. The S&P Global India Manufacturing Purchasing Managers’
Index (PMI) dropped from 58.7 in May to 57.8 in June after being corrected for
seasonal factors. June’s reading, meanwhile, is only behind May’s in terms of
annual growth rate.

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Despite the dip, the
survey’s headline number indicated a significant improvement in operational
circumstances, with the strength of demand having a favorable impact on sales,
production, stockpiling, and employment.

The June PMI reading
indicated that business conditions had improved for the twenty-fourth month in
a row. A PMI reading above 50 suggests growth, while a reading below 50
indicates contraction.

The Purchasing
Managers’ Index for June confirmed once again the high level of interest in
goods manufactured in India.

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

Strong demand, fresh
client inquiries, and promotional initiatives all contributed to upbeat
projections for future expansion. The study found that corporate optimism is at
its highest level in six months.

Manufacturers of goods
tried to increase output by hiring more people in June. The rate of job growth
was moderate and largely unchanged from May.

Producers of goods
resorted to increasing their spending on inputs. Positive demand trends and
increased output requirements led to a sizable gain, the second-strongest in
over 12 years.

On the cost side,
charge inflation has risen to its highest level in 13 months due to rising
labour expenses and robust demand.

When faced with strong
consumer demand, companies quickly responded by raising prices. According to
Lima, companies can increase their output costs by passing them on to customers
while still being competitive.

S&P Global collects
data for the S&P Global India Manufacturing PMI from a panel of over 400
manufacturing purchasing managers in India via online questionnaires. The panel
is divided into subgroups based on the percentage of GDP each industry
contributes and the size of the companies represented. 

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