Manufacturing activity slowed in June due to lesser number of new orders, according to a private sector survey.
The Nikkei India Manufacturing Purchasing Managers’ Index stood at 52.1 in June, down from the three-month high of 52.7 in May. A reading over 50 indicates an expansion, while one below 50 denotes a contraction in activity. “The Indian manufacturing sector lost growth momentum in June, following an acceleration in May,” the report said. “A softer increase in new work intakes translated into slower rises in output and employment, while the upturn in quantities of purchases strengthened.”
The IHS Markit India Manufacturing Purchasing Managers’ Index® (PMI®) was at 52.1 in June, down from May’s three-month high of 52.7, but still signalling an improvement in operating conditions across the sector,” the report added.
Lowest since Q2 of FY18
“That said, the average PMI reading for the opening quarter of FY20 was the lowest recorded since the second quarter of FY18.”
According to the report, consumer goods was the key source of growth, with the sector registering robust increases in sales, output, and employment in June.
The intermediate goods sector saw a modest expansion in production and new work, but employment stagnated. Operating conditions in the capital goods sector were broadly unchanged, the report added. “PMI data highlighted a slight setback in the Indian manufacturing sector during June,” Pollyanna de Lima, Principal Economist at IHS Markit said.
“Upbeat growth projections continued to underpin job creation and the stockpiling of inputs, but cracks appeared in the form of a softer rise in employment and waning optimism,” Ms. De Lima added.