Mumbai: Continuing with its upward momentum, India’s manufacturing activity grew at its fastest pace in four months on the back of new orders from both domestic and overseas markets.
The seasonally adjusted Nikkei India Manufacturing Purchasing Managers Index (PMI) rose to 51.8 in July as compared to 51.7 in June. A reading above 50 indicates expansion in activities while a reading below 50 indicates contraction.The expansion in order books was led by consumer goods producers.
Growth of new export orders climbed to a six-month high, with increases seen in the consumer and capital goods categories. According to the survey, Indian manufacturers stepped up production, with July’s upturn being the most pronounced since March.
Though the overall increase in output was led by consumer goods producers, growth was also recorded in the intermediate goods category.
However, higher output didn’t lead to a commensurate rise in hiring. Only 1 per cent of surveyed companies took on additional workers in July while almost all the remaining respondents signalled no change in payrolls. “The ongoing muted trend for employment indicates that companies remain somewhat uncertain regarding the sustainability of the upturn,” said Pollyanna De Lima, economist at Markit, which compiled the survey.
Analysts at Nomura said, “Surprisingly, concerns over spill-over from the Brexit vote have not yet had any perceptible impact.”
