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Manufacturing PMI eases to 51.3 in June

01 Jul 2015 Evaluate

The manufacturing sector of India eased in June due to weak growth in new business inflows as companies took a cautious line on hiring and a weaker rise in new business inflows. Recording above the 50.0 no-change mark for the twentieth successive month, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index TM (PMI)TM - a composite single figure indicator of manufacturing performance index fell from 52.6 in May to 51.3 in June.

The survey stated that the PMI for June were weighed down by slower increases in both output and new orders. Production growth eased since May and was moderate overall. Incoming new work expanded at a modest pace that was the weakest since last September.

India’s manufacturing sector saw employment remain broadly unchanged in June. Significant changes in payroll numbers have not been recorded since the opening month of 2014, and firms reportedly maintained a cost-cautious approach to hiring in the survey period.

The survey however stated that workforce numbers were, once again, unchanged during the month, reflecting firms’ efforts to keep expenses stable. Encouragingly, inflation rates softened, with both input costs and output charges rising at below-trend rates. Pre- and post-production stocks both increased in June with survey participants linking the rise in holdings of finished goods to forecasts of higher inflows of new work. Nonetheless, the rate of accumulation was modest and weakened since May. Growth of stocks of purchases also eased and was the slowest in eight months.

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