Boost in production hiked the manufacturing industry: PMI Report

New Delhi, Aug 1 (KNN) The manufacturing industry of the country has improved in the month of July as the companies scaled up production in response to a quicker upturn in factory orders. The IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) rose to 52.5 in July against 52.1 in the month of June.

“With an optimistic growth projection, underpinned job creation and an uptick in input purchasing have led the hike. The hike is a bit higher than the average for the calendar year 2018, which was 52.3, but below its long-run trend 53.9. A strong improvement in business conditions at intermediate goods makers contributed into this”, the report stated.

In the flip of this, the capital goods sub-sector contracted, with lower sales causing reductions in output and quantities of purchases and job creation came to a halt.

On the monthly basis of the past two years, it has been observed that the aggregate manufacturing production in India increased in July. The rate of expansion was below its average but improved from June. Despite rapid growth from June, the pace of expansion was moderate in the context of historical survey data. New export orders also rose, but a slowdown in growth was noted. In fact, external sales rose to the least extent since April 2018 as factories took a hit from subdued global trade flows.

Hiring continued in July and additional inputs were purchased. Data of July pointed to mild capacity pressures among goods producers, with outstanding business increasing for the first time in three months despite expanded workforces.

Input costs increased slightly in July as higher prices for steel, chemicals, cotton, and freight were partly offset by lower charges for base oil, copper and plastics. Hike in pre-production stocks stemmed from greater buying activity, while the drawdown of finished goods inventories reflected efforts to fulfill sales. The overall rate of inflation was at a three-month low and well below its long-run average. Output charges rose marginally in July, following reductions in each of the two previous months.