The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) surged to 58.6 in August from July’s 57.7, indicating the second-best improvement in the health of the sector for nearly three years.
India’s manufacturing sector showcased its fastest growth in three months in August, driven by robust growth in new orders and output increase, according to S&P Global monthly survey. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) surged to 58.6 in August from July’s 57.7, indicating the second-best improvement in the health of the sector for nearly three years. Demand strength was pivotal to August’s robust performance, spurring the fastest upturn in new orders since January 2021. Competitive pricing and advertising were also cited as factors behind sales growth, the survey said.
Further, international sales too added to manufacturers’ total order books. “Not only did new export orders increase for the seventeenth month running halfway through the second fiscal quarter, but also to the greatest extent since November 2022,” it said. Meanwhile, a healthy demand environment and favourable market conditions led to output increase for the twenty-sixth successive month, and to the greatest extent in just under three years.
The output increase led to manufacturers purchasing additional raw materials and semi-finished items in August, which subsequently resulted in sharp rise in buying levels, which was at one of the fastest rates seen in over 12 years.
However, S&P Global survey maintained that overall employment rose at the slowest pace in four months. “Indian manufacturers reportedly hired a combination of permanent and temporary staff on both part- and full-time bases. New order growth was cited as the main reason behind job creation. Overall employment rose at the slowest pace in four months, but one that was above the series trend,” it said.
This is a welcome figure for the Indian economy, which grew 7.8 per cent in April-June, slightly above the Reuters forecast of 7.7 per cent, led by robust demand, and was expected to remain a bright spot in the global economy.
Pollyanna De Lima, Economics Associate Director, S&P Global Market Intelligence, said, “Robust and accelerated increases in new orders and production suggest that the sector looks set to provide a strong contribution to second quarter (fiscal) economic growth. “Companies’ strategic focus towards a global orientation were evident via a sharp and quicker expansion in international sales. Export-centric tactics should help ensure that production remains on an upward path in the coming months.”
SEP Global further stated, “Upward revisions to marketing budgets, better customer relations, demand strength and a healthy number of client enquiries underpinned upbeat forecasts among manufacturers regarding the year-ahead outlook for production. Although historically elevated, the overall level of positive sentiment slipped to a three-month low due to inflation concerns.”
In PMI parlance, a print above 50 means expansion while a score below 50 indicates contraction. The PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.
Source:financialexpress.com