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India's PMI manufacturing index slips to 57.8 in June from 58.7 in May

Jul 4, 2023

By: BlinkX Research Team

India's manufacturing industry expanded at the second-fastest rate in June, albeit at a slightly slower pace than in May, led by robust demand despite higher inflationary pressures, as PMI data showed Monday. The S&P Global Manufacturing Purchasing Managers' Index fell to 57.8 in June from May's 58.7.

Although the latest PMI results indicated contained input cost inflation, there was a marked increase in output charges. Positive demand dynamics and greater labour costs pushed charge inflation to a 13-month high.

Indian goods producers registered a sharp increase in new work intakes during June and one that was among the strongest seen since February 2021. In addition to favourable demand conditions, panellists linked the upturn to advertising and new product releases. Concurrently, new export orders rose solidly, though at a slower pace than in May.

Although average purchasing prices continued to increase in June, the rate of inflation was mild by historic standards and among the lowest seen over the past three years.

Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence said "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 the growth of output, employment, quantities of purchases and input stocks. These positive developments instilled greater confidence into manufacturers regarding growth prospects, boding well for business investment and the labour market.”

"The surge in input buying underscored the optimism and proactive stance of manufacturers, as they sought to capitalise on favourable market conditions and obtain resources to support production growth. "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," Pollyanna De Lima added.

Source: Media reports