Indian manufacturing activity growth eased in the month of August, but it remains above the boom-or-bust line of 50 that separates expansion from contraction, as a sustained improvement in demand conditions boosted new order intakes at Indian manufacturers during August, which in turn pushed output growth to a nine-month high. According to the report, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) fell to 56.2 in August from 56.4 in July.
The report further noted that production volumes were also supported by a pick-up in exports and upbeat projections for the year-ahead outlook. Firms were at their most optimistic for six years. Besides, international markets gave impetus to total sales, as seen by a marked and quicker increase in new export orders halfway through the second fiscal quarter.
On the inflation front, although manufacturers continued to signal higher prices for a wide range of materials in August, the overall rate of cost inflation softened to a one-year low as commodity prices (particularly aluminium and steel) moderated. There was a moderate upturn in factory gate charges in August as monitored companies lifted their fees in line with the passing on of higher freight, labour and material costs to clients.
