India's HSBC May manufacturing PMI stood at 51.4 as against 51.3 in April. May data indicated that production volumes at Indian manufacturers continued to rise. Growth of both total new orders and new export business accelerated over the month, leading to further job creation across the sector.
Up marginally from 51.3 in April to 51.4 in May, the seasonally adjusted HSBC India Purchasing Managers’
Index (PMI) pointed to a slight improvement in operating conditions and one that was weaker than the series average.
Output rose for the seventh consecutive month in May. That said, the rate of expansion was unchanged from the modest pace registered in April. Panellists highlighted stronger increases in new orders, although there were mentions that growth was stymied by powercuts and the elections. The latest rise in production was broad-based by sector, with the sharpest expansion signalled by consumer goods producers.
May data highlighted further rises in incoming new work, marking a seven-month sequence of expansion.
Moreover, the pace of increase accelerated to the quickest since February. Those survey respondents reporting higher new orders commented on the signing of new contracts and improved demand from both domestic and foreign clients. Growth of order book volumes was registered across the three broad areas of the manufacturing economy, led by consumer goods producers.
Commenting on the India Manufacturing PMI survey, Frederic Neumann, Co-Head of Asian Economic Research at HSBC said: "The momentum in the manufacturing sector improved at the margin, thanks to higher domestic and export order flows. However, output growth held steady as frequent power cuts forced firms to accumulate backlogs at a faster pace. Encouragingly, input price pressures eased further, but with output prices still rising the RBI cannot take down its inflation guards."
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