July Manufacturing PMI grows at fastest pace in last six months
Updated: Aug 03, 2015 04:06:48pm
New Delhi, Aug 3 (KNN) India’s manufacturing activities rose to a six-month high in July as orders from both domestic and overseas markets shot up, showed widely-tracked Nikkei purchasing managers' index (PMI) on Monday.
July saw manufacturing business conditions across India improve further. A solid and accelerated increase in new orders led firms to raise production accordingly, said the Nikkei India Manufacturing PMI report.
Moreover, growth of both domestic and foreign demand was reported, with new business from abroad rising at the quickest rate since February. On the price front, a marginal rise in costs was registered, whereas average
July PMI increased to 52.7 points in July, from 51.3 in the previous month. It was highest since January's 52.9 points. A reading above 50 shows expansion and the one below means contraction.
The data which came a day before the RBI monetary review also showed that while input inflation rose marginally, output inflation remained stagnant. Both the output and new orders led to the rise.
Markit Economics, which compiles PMI, said output continued to grow in July, with increases seen across sectors. Moreover, the overall rate of expansion was solid and faster than in June. Underpinning the rise in production levels was a sharper increase in new business inflows. In fact, growth of new orders gathered pace across the three broad areas of the manufacturing economy.
Anecdotal evidence highlighted stronger demand from both domestic and foreign clients.
Growth of new export business accelerated in July and was the most pronounced in five months. Panellists reported having been able to secure new contracts in tandem with successful price negotiations with clients.
But the data on exports doesn't seem to be in sync with official figures. Merchandise exports declined for the seventh consecutive month in June.
Despite the uptick in growth, manufacturers continued to cut workforce numbers in July. Nonetheless, the rate of job shedding was only marginal as around 96% of panellists reported no change in employment from the levels recorded in the prior month.
“Although the latest data suggests that the manufacturing upturn gained traction, worries regarding the labour market persist. Continued job shedding highlights the concern felt by businesses towards the outlook, with firms failing to increase workforce numbers to any great extent since early 2014," said Pollyanna De Lima, Economist at Markit and author of the report.
As orders rose, there was evidence of building pressures on the capacity of Indian manufacturers’ operations, as outstanding business was accumulated for the second month running and at the quickest pace since March.
De Lima said while this is a generally positive set of data, upcoming PMI data will indicate whether the manufacturing sector can sustain this momentum.
The PMI survey covers 300 companies. The index takes into account, output, orders, employment, stocks of items purchased, suppliers' delivery times. (KNN Bureau)
July saw manufacturing business conditions across India improve further. A solid and accelerated increase in new orders led firms to raise production accordingly, said the Nikkei India Manufacturing PMI report.
Moreover, growth of both domestic and foreign demand was reported, with new business from abroad rising at the quickest rate since February. On the price front, a marginal rise in costs was registered, whereas average
July PMI increased to 52.7 points in July, from 51.3 in the previous month. It was highest since January's 52.9 points. A reading above 50 shows expansion and the one below means contraction.
The data which came a day before the RBI monetary review also showed that while input inflation rose marginally, output inflation remained stagnant. Both the output and new orders led to the rise.
Markit Economics, which compiles PMI, said output continued to grow in July, with increases seen across sectors. Moreover, the overall rate of expansion was solid and faster than in June. Underpinning the rise in production levels was a sharper increase in new business inflows. In fact, growth of new orders gathered pace across the three broad areas of the manufacturing economy.
Anecdotal evidence highlighted stronger demand from both domestic and foreign clients.
Growth of new export business accelerated in July and was the most pronounced in five months. Panellists reported having been able to secure new contracts in tandem with successful price negotiations with clients.
But the data on exports doesn't seem to be in sync with official figures. Merchandise exports declined for the seventh consecutive month in June.
Despite the uptick in growth, manufacturers continued to cut workforce numbers in July. Nonetheless, the rate of job shedding was only marginal as around 96% of panellists reported no change in employment from the levels recorded in the prior month.
“Although the latest data suggests that the manufacturing upturn gained traction, worries regarding the labour market persist. Continued job shedding highlights the concern felt by businesses towards the outlook, with firms failing to increase workforce numbers to any great extent since early 2014," said Pollyanna De Lima, Economist at Markit and author of the report.
As orders rose, there was evidence of building pressures on the capacity of Indian manufacturers’ operations, as outstanding business was accumulated for the second month running and at the quickest pace since March.
De Lima said while this is a generally positive set of data, upcoming PMI data will indicate whether the manufacturing sector can sustain this momentum.
The PMI survey covers 300 companies. The index takes into account, output, orders, employment, stocks of items purchased, suppliers' delivery times. (KNN Bureau)
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