HSBC manufacturing PMI sees fastest pace of growth since Feb

industry-2Registering strongest growth in June since February, there has been an increase in the manufacturing output for the eighth successive month and at the same time, growth of export orders has hit a three-month high, according to a survey.

India’s manufacturing sector has registered strongest growth in June since February, according to HSBC Purchasing Manager Index (PMI). The index, a measure of factory production, rose to 51.5 in June from 51.4.

“Greater domestic and foreign demand led companies to increase production levels further. Buying activity expanded at a faster rate, while employment continued to rise. Input cost and output price inflation accelerated over the month, although in both cases the rates of increase were below their respective long-run averages,” the survey said.

Commenting on the survey, Co-Head of Asian Economic Research at HSBC, Frederic Neumann, said that things are gradually improving in India’s manufacturing sector. Output picked up in June, supported by growing order flows, especially from overseas.

“The muted pace will suit the RBI: since input and output prices are rising as well, faster growth would only stoke inflation and require tightening,” he said.

Amid evidence of new order growth and re-stocking efforts, Indian manufacturers raised their quantity of purchases in June. Buying activity increased for the eighth month in succession and at the fastest pace since March 2013.

For the ninth consecutive month, manufacturing employment rose in June. However, the rate of job creation was marginal and slower than in the previous month.

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