India Manufacturing Sector Expands Further In June

India's manufacturing activity expanded at an accelerated pace in June on the back of strong demand conditions after losing some growth momentum in May amid intensive heat wave effects, survey results from S&P Global showed on Monday.

The seasonally adjusted HSBC Manufacturing Purchasing Managers' Index climbed to 58.3 in May from 57.5 in May. A score above 50.0 indicates expansion.

During May, underlying demand remained favorable, and new business inflows increased further. As a result, manufacturing output grew at a faster pace compared to May. The growth was more evident in the consumer goods industry.

In line with rising new orders, Indian manufacturers lifted their workforce numbers in June. Moreover, the rate of job creation was the strongest in the survey history.

 

On the price front, overall input costs showed a further increase in June due to higher staff expenses along with increased material and transportation costs. Nonetheless, the rate of inflation has eased since May. Additional cost burdens forced firms to raise their selling prices.

Looking ahead, firms remained positive about output growth over the coming year amid hopes of further improvements in demand and order book volumes. Nevertheless, the overall level of confidence receded to a three-month low.

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