Manufacturing growth in the minimum of 15 months in August: PMI
BENGALURU: Expansion in India Manufacturing sector In August, demand and production grew at the weakest pace in a year and cost pressures increased, a private sector survey showed on Monday.
The survey comes after official figures showed that India's economy grew at an annual rate of 5.0% last quarter, the slowest in more than six years and significantly weaker than 5.7% in a Reuters survey .
The Nikkei Manufacturing The Purchasing Managers Index, compiled by IHS Markit, decreased to 51.4 in August from July 52.5, the weakest since May 2018. However, it has remained above the 50 brands that separate the growth from the contraction. for more than two years.
An undesirable combination of economic growth slowdown and higher inflationary cost pressures in the Indian manufacturing industry was observed in August, Pollyanna De Lima, principal economist at IHS Markit, said in a statement.
A subscript that tracks general demand reached its weakest point in more than a year and foreign orders increased at their slowest pace in 16 months.
Input costs increased at their fastest pace in nine months, while the rate of increase in production prices was slower than in July, suggesting that the profit margins of the companies were reduced.
Given that inflation is expected to remain below the 4% medium-term target of the Reserve Bank for the rest of this year, the central bank is expected to decline further in October to drive a slowdown in the economy.
Another worrying sign was the first drop in the purchase of supplies for 15 months, which reflected a mixture of intentional reductions in stocks and a shortage of available funding, De Lima said.
Until manufacturers are willing to loosen bag chains, it is difficult to anticipate a significant rebound in production growth on the horizon.
In addition to the bleak image, the tighter margins and the decline in demand growth meant that companies barely increased the workforce.
However, companies remained optimistic over the next 12 months. Expectations of future production increased to their highest level in more than a year, the survey showed.