NEW DELHI: India’s manufacturing output expanded for the first time in five months in August, indicating a shift in industrial activity following the gradual relaxation of lockdown restrictions, starting in June, according to a private survey.
According to data analysis firm IHS Markit, India’s Purchasing Managers Index (PMI) for the manufacturing industry rose to 52 in August from 46 in July. A figure above 50 indicates expansion, while a print below 50 indicates contraction.
Shreeya Patel, an economist at IHS Markit, said the August reading highlighted positive developments in the health of the Indian manufacturing sector, signaling moves towards a recovery from recession in the June quarter. “The rebound in demand in national markets led to spikes in production and the purchase of inputs,” he added.
India’s economy contracted to a record 23.9% in the June quarter of fiscal year 21, underscoring the magnitude of the economic damage inflicted by the pandemic.
Patel, however, said that not all was positive in August as employment continued to decline despite signs of capacity pressures as companies scrambled to find suitable workers. “The inflation rate for input prices was solid, after four monthly drops in cost burdens. Companies, however, continued their efforts to boost sales amid increased competitive pressure and lowered their prices. for sale, “he added.
IHS Markit, a data analytics firm, said production growth was largely driven by higher demand for Indian products from customers following the resumption of business operations, although the decline in foreign exports it weighed slightly on new general orders, as companies cited moderate demand conditions from abroad.
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