Bengaluru: India's manufacturing sector expanded at its quickest pace in three months in May on improved output and new orders, according to a private survey which also showed a pick up in hiring.
The survey found increased optimism about manufacturing activity over the coming year, probably helped by Prime Minister Narendra Modi scoring a dramatic election victory on a mandate of business-friendly policies.
Almost 70 per cent of responses were collected after exit polls showed the BJP would return to power for a second term.
The Nikkei Manufacturing Purchasing Managers' Index incre-ased to 52.7 in May from April's eight-month low of 51.8, staying above the 50-mark threshold that separates growth from contraction for a 22nd straight month.
"A revival in new order growth promoted a faster upturn in manufacturing production, as Indian firms sought to replenish inventories utilised in May to fulfill strengthening dem-and," Pollyanna De Lima, Principal Econo-mist at IHS Markit, said in a release.
The new business orders sub-index, which tracks overall demand, rose as foreign demand increased at the fastest pace in three months. Output also grew at the strongest rate since February. That led firms to increase the pace of hiring from the previous month.
"To assist with higher output needs, and benefit from relatively muted cost inflation, companies stepped up hiring and input purchasing," De Lima said.
— Reuters
