May data indicated that production volumes at Indian manufacturers continued to rise. Growth of both total new orders and new export business accelerated over the month, leading to further job creation across the sector.
Output rose for the seventh consecutive month in May. That said, the rate of expansion was unchanged from the modest pace registered in April. Panellists highlighted stronger increases in new orders, although there were mentions that growth was stymied by powercuts and the elections. The latest rise in production was broad-based by sector, with the sharpest expansion signalled by consumer goods producers.
May data highlighted further rises in incoming new work, marking a seven-month sequence of expansion. Moreover, the pace of increase accelerated to the quickest since February. Those survey respondents reporting higher new orders commented on the signing of new contracts and improved demand from both domestic and foreign clients. Growth of order book volumes was registered across the three broad areas of the manufacturing economy, led by consumer goods producers.
New orders from abroad also increased during May, thereby stretching the current period of expansion to eight months. New export business rose at a solid rate that was quicker than in April. Surveyed firms reported having benefited from favourable exchange rates. Overseas demand improved in two of the three subcategories, the exception being investment goods.
Staffing levels were raised in May, amid evidence of increased production requirements. Employment growth has maintained a broadly steady trend pace in the current eight-month expansionary sequence. All three monitored sub-sectors registered higher workforce numbers.
Indian manufacturers indicated that purchasing activity increased further in May. Where input buying rose, this was associated with new order growth. Nonetheless, the rate of expansion was only slight and moderated since the previous month. Growth of quantity of purchases was noted across the three market groups.
More From This Section
Input costs continued to rise in May, albeit at the weakest rate in one year. There were reports of higher prices paid for some raw materials, although a number of panellists reported successful price negotiations with suppliers. Concurrently, output charges increased further. The rate of charge inflation was, however, marginal and weaker than the series average.
While stocks of purchases were broadly unchanged, post-production inventories increased in May. Meanwhile, outstanding business rose further during the latest month, with monitored firms reporting power outages.
Powered by Capital Market - Live News
