NEW DELHI: Slower expansion in output and domestic demand moderated India’s manufacturing activity in May, a private survey showed on Friday.
At 51.2, the Nikkei Manufacturing Purchasing Managers’ Index down was lower than April’s 51.6 but above the 50 mark that separates expansion from contraction.
“The latest PMI survey signalled a further, albeit slower, improvement in the health of the manufacturing sector in May. This was reflective of weaker expansions in output, employment and new business,” said Aashna Dodhia, an economist at IHS Markit and author of the report.
The data indicator came a day after official showed India’s economy grew at its fastest in seven quarters in the January-March period at 7.7%, bolstered by strong performance in construction, manufacturing and public services.
The survey showed build-up of inflationary pressures re-emerging with input cost and output charge inflation at the strongest since February, due to the upswing in global oil prices, giving an indication about the Reserve Bank of India’s likely monetary action in near future.
“In efforts to contain inflation and maintain financial stability, it is likely that the RBI will raise interest rates over the summer,” Dodhia added.
The survey also showed foreign demand for manufactured goods rising at the strongest pace in three months.
At 51.2, the Nikkei Manufacturing Purchasing Managers’ Index down was lower than April’s 51.6 but above the 50 mark that separates expansion from contraction.
“The latest PMI survey signalled a further, albeit slower, improvement in the health of the manufacturing sector in May. This was reflective of weaker expansions in output, employment and new business,” said Aashna Dodhia, an economist at IHS Markit and author of the report.
The data indicator came a day after official showed India’s economy grew at its fastest in seven quarters in the January-March period at 7.7%, bolstered by strong performance in construction, manufacturing and public services.
The survey showed build-up of inflationary pressures re-emerging with input cost and output charge inflation at the strongest since February, due to the upswing in global oil prices, giving an indication about the Reserve Bank of India’s likely monetary action in near future.
“In efforts to contain inflation and maintain financial stability, it is likely that the RBI will raise interest rates over the summer,” Dodhia added.
The survey also showed foreign demand for manufactured goods rising at the strongest pace in three months.