Robust improvement in biz conditions across Indian manufacturing: S&P

Falling from 58.2 in April to 57.6 in May, the seasonally-adjusted manufacturing PMI highlighted the weakest improvement in operating conditions since February. The headline figure was, however, well above both the neutral mark of 50 and its long-run average of 54.1.

Although rates of increase in new orders and output retreated to three-month lows, they remained well above their respective long-run averages.

Panellists suggested that demand strength continued to support sales and production, though competition, inflation and the India-Pakistan conflict had reportedly weighed on growth,  a release from S&P Global Ratings, which conducted the survey said.

Goods producers lifted input buying and headcounts again, with the latter experiencing a series-record upturn.

Meanwhile, cost inflation climbed to a six-month high and selling prices were raised to one of the greatest extents seen in eleven and a half years.

Monitored companies linked growth to healthy domestic and international demand, alongside successful marketing initiatives. The upturn was curbed by cost pressures, fierce competition and the India-Pakistan conflict.

New export orders rose at one of the strongest rates recorded in three years on favourable demand from Asia, Europe, the Middle East and the United States.

Positive sales developments encouraged companies to purchase additional raw materials for use. The pace of expansion was sharp and eased only marginally since April.

Firms also hired additional staff in May, with the rate of job creation climbing to a new series record. Sustained job creation enabled manufacturers to stay on top of their workloads in May.

Outstanding business volumes were unchanged, ending a six-month period of accumulation, and manufacturers faced another monthly increase in purchasing prices and greater outlays on freight and labour.

As a result of rising operating expenses and supported by strong demand, firms increased their selling prices in May.

ALCHEMPro News Desk (DS)