New Delhi, Sept 1 (KNN) The factory output grew at a slower pace in August as both output and new orders were sluggish that forces companies to cut prices, according to a survey.

The Nikkei India Manufacturing PMI - a composite monthly indicator of manufacturing performance - stood at 52.3 in August, down from a six-month high figure of 52.7 in July, indicating a slower pace of growth in the sector. 
 
Although manufacturing business conditions continued to improve in August, latest data pointed to weaker rates of expansion for both output and new orders. On the price front, input costs decreased for the first time in six months and, subsequently, firms lowered their selling prices. Elsewhere, post-production inventories contracted at the sharpest pace since data were first collected in April 2005.
 
Commenting on the Indian Manufacturing PMI survey data, Pollyanna De Lima, Economist at Markit and author of the report said, “Growth of Indian manufacturing production waned in August on the back of softer improvements in both domestic and foreign demand. This led firms to keep payroll numbers unchanged during month.”
 
A sharp increase in buying levels coupled with a record drop in stocks of finished goods, however, indicates that output growth will likely rebound in coming months.
 
“Meanwhile, falling global commodity prices resulted in an overall reduction in cost burdens. This provided companies with more room for price negotiations and tariffs were lowered on average. As inflation concerns fade and demand growth loses momentum, further accommodative policy should not be discounted,” she added. (KNN Bureau)