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India's manufacturing PMI surges to three month high of 51.7 in June

01 Jul 2016 Evaluate

Once again putting them in gaining trajectory, India's manufacturing sector output surged to three-month high in June, driven by stronger demand, pointing to some improvement in the health of the sector. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) edged to 51.7 in June from 50.7 in May, a reading above 50 on the index indicates economic expansion.

According to the survey, the contributing factors to the upward movement in the PMI were stronger rates of growth in new orders and output. Incoming new work rose across the three broad areas of the manufacturing economy, as did production. The best-performing category was consumer goods. The domestic market continues to be the main growth driver, as the Indian economic upturn provides a steady stream of new business. Besides, there was also a sign of improvement in overseas markets, as new foreign orders rose in June following a decline in May.

Though the new export orders increased in June, the rate of expansion was only slight and below the long-run series average. Two of the three monitored market groups recorded higher levels of new business from abroad, the exception being intermediate goods.

Input costs in June increased for the ninth month running. The rate of inflation eased to the slowest since March, and was moderate overall. Concurrently, factory gate charges were broadly unchanged in June. Furthermore, there was broadly no change to manufacturing employment in India during June due to sufficient staff to work on both new and existing projects and others noting shortages of skilled labour in the country.


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