According to an S&P Global survey, manufacturing activity in India increased in July at the fastest rate in eight months as a result of new business orders and production.
S&P Global India Manufacturing Purchasing Managers’ Index (PMI) jumped to 56.4 in July from 53.9 in June. A reading above 50 indicates expansion, while below 50 denotes contraction.
The growth was a result of strong demand and increase in sales. New orders increased in July, regaining the growth impetus that had been lost in June. As new export orders increased at a steady rate, international markets helped to drive the increase in overall order books, according to the survey.
Producers of goods reported a smaller increase in their costs in July. According to the survey, the rate of inflation decreased to an 11-month low even though the price of raw materials kept rising. The pace of increase in output prices in July was the smallest in the previous four months, just like it was for input costs.
In the meantime, retail inflation in India in June slightly decreased to 7.01%. The poll also showed that although businesses increased their input purchases and reported strong manufacturing activity, employment creation was still only moderate. The minor rise in employment was largely consistent with the five-month growth sequence.
