India's manufacturing sector activity for June was at 57.8 lower than May's 31-month high of 58.7, revealed latest data from manufacturing Purchasing Managers' Index (PMI), compiled by S & P Global.
The June PMI data pointed to an improvement in overall operating conditions for the 24th straight month.
The PMI of 57.8 is slightly higher than the key level of 50, indicating expansion in activity. This expansion was due to a jump in new work orders, which was one of the strongest rates since February 2021. International orders in June were also higher though it increased at a slower pace.
June's PMI results again showed robust demand for Indian-made products, both in the domestic and international markets.
"Positive client interest continued to support the manufacturing industry, driving growth of output, employment, quantities of purchases and input stocks," said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.
"Presented with buoyant demand, manufacturers seized the opportunity to adjust their pricing strategies. The latest increase in output charges reflected firms' ability to pass on higher cost burdens to customers while maintaining a competitive edge," Lima noted.
Increased production and employment
Over the last one and a half year the production has increased at one of the fastest rates in order to meet demand. In June manufacturers employed additional workers as the capacity pressures were mild.
In addition strong underlying demand also boosted business confidence, pushing the positivity around future business activity to its highest in this year.
The higher prices for labour in addition to some raw materials pushed the input costs in June. However, the rate of inflation was only minutely higher in comparison to May and below the long-run average.
