(MENAFN- KNN India) The health of the Indian manufacturing economy improved further in June, but output growth eased on the back of a weaker rise in new business inflows, according to an HSBC survey.
The Nekkie India Purchasing Managers' Index (PMI) fell to 51.3 in June from 52.6 in May, amid slowest rise in new orders since September 2014.
Workforce numbers were, once again, unchanged during the month, reflecting firms' efforts to keep expenses stable. Encouragingly, inflation rates softened, with both input costs and output charges rising at below-trend rates.
The survey said, "Weighing on the PMI were slower increases in both output and new orders. Production growth eased since May and was moderate overall. Incoming new work expanded at a modest pace that was the weakest since last September."
Sector data highlighted rising output and order book volumes across the three monitored market groups.
For both variables, growth was strongest at capital goods producers. New export orders received by Indian manufacturers rose for the twenty-first month running in June.
On employment, the report said, there are no significant changes in payroll numbers since the opening month of 2014, and firms reportedly maintained a cost-cautious approach to hiring.
Commenting on the Indian Manufacturing PMI survey data, Pollyanna De Lima, Economist at Markit and author of the report, said "Following the pick-up in the growth rates for output and new orders seen in May, June PMI data pointed to a slowdown in India's economic upturn.
New business expanded at a noticeably weaker pace, in part reflecting a loss of momentum in export business. Moreover, manufacturers remained in cautious spirits and employment numbers were unchanged once again.
"Nonetheless, broad-based increases in both production and order book volumes were maintained, with consumer, intermediate and investment goods producers all recording growth.
On the price front, there was welcome news from an easing in inflation rates. Costs and charges both rose at rates that were historically muted. With price pressures being weak and growth losing steam, June's dataset suggests that the RBI's loosening cycle is, therefore, likely to continue", she said. (KNN Bureau)
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