New Delhi: The country’s manufacturing sector activity in June grew at the strongest pace this year, supported by rise in domestic and export orders, says a monthly survey.
The Nikkei India Manufacturing Purchasing Managers Index (PMI) rose from 51.2 in May to 53.1 in June, registering the fastest improvement since December 2017.
This is the 11th consecutive month that the manufacturing PMI remained above the 50-point mark. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.
“India’s manufacturing economy closed the quarter on a solid footing against a backdrop of robust demand conditions, highlighted by the sharpest gains in output and new orders since last December,” said Aashna Dodhia, Economist at IHS Markit and author of the report.
Reflecting greater production requirements, manufacturing firms were encouraged to engage in purchasing activity and raise their staffing levels.
“On the jobs front, the latest survey data pointed to a healthy labour market, with job creation accelerating to the sharpest since December 2017,” Dodhia said.
On the price front, input cost inflation and output charges rose at a stronger pace, indicating that the central bank might tighten the monetary policy.
“Input cost inflation quickened to the strongest since July 2014 in June, suggesting that the central bank could remain under pressure to tighten monetary policy,” Dodhia added.
RETAIL INFLATION FLAT: Retail inflation for industrial workers remained flat at 3.96 per cent in May compared with 3.97 per cent in April this year, a Labour Ministry statement said Monday.
According to the statement, the food inflation based on CPI-IW (Consumer Price Index-Industrial Workers) stood at 1.66 per cent in May against 1.33 per cent in the previous month and (-) 1.63 per cent during May 2017.
“The year-on-year inflation based on CPI-IW stood at 3.96 per cent for May, 2018 as compared to 3.97 per cent for the previous month (April) and 1.09 per cent during the corresponding month (May) of 2017,” it said.
The maximum upward pressure to the change in current index came from food group contributing (+) 0.68 percentage points to the total change.
Rice, groundnut oil, fish fresh, poultry (chicken), eggs (hen), milk, pure ghee, chillies green, onion, brinjal, cabbage, carrot, french bean, green coriander leaves, spinach, potato, radish, are responsible for the rise in index.
However, the surge was checked by a decline in prices of wheat, wheat atta, mustard oil, chillies dry, lady’s finger, mango (ripe), ridge gourd etc.
INFRA GROWTH DIPS: Growth of eight infrastructure industries dropped to a 10-month low of 3.6 per cent in May due to a decline in production of crude oil and natural gas.
The eight sectors, which also include coal, refinery products, fertilisers, steel and cement, had expanded by 3.9 per cent in May 2017, according to the data released by the commerce and industry ministry Monday.
This is the lowest growth rate since July 2017 when infrastructure industries had expanded by 2.9 per cent. The growth rate in April was 4.6 per cent.
Crude oil and natural gas registered a negative growth of 2.9 per cent and 1.4 per cent respectively in May compared to the year-ago period.
