Growth of manufacturing production in India was curbed in August by the pandemic and rising input costs. A softer upturn in sales led companies to pause their hiring efforts, with business confidence dampened by concerns surrounding the damaging impact of COVID-19 on demand and firms' finances. However, with order books still expanding and businesses retaining optimistic growth projections, stock-building efforts continued and additional materials were bought. On the price front, a softer but still sharp rise in input costs underpinned a quicker increase in charges.
Registering 52.3 in August, the seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index pointed to an improvement in overall operating conditions for the second straight month. That said, the headline figure was down from 55.3 in July, indicating a softer rate of growth that was subdued in the context of historical survey data.
Manufacturing production increased for the second straight month in August amid reports of improved sales and demand. However, growth was curbed by the pandemic and elevated price pressures. The overall rate of expansion was modest and below its long-run average. New orders also rose for the second straight month, and at a softer pace. Some firms suggested that favourable market conditions and fruitful advertising boosted demand for their goods. Others noted that sales fell due to the pandemic.
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