According to a poll released on Monday by S&P Global, India’s manufacturing activity grew in July at the fastest rate in eight months as a result of new business orders and output.
S&P Global India Manufacturing Purchasing Managers’ Index (PMI) jumped to 56.4 in July from 53.9 in June. A reading above 50 indicates expansion while a print below that denotes contraction.
According to the poll, the gain was brought driven by a surge in sales and robust demand. As per Pollyanna De Lima, associate director of economics at S&P Global Market Intelligence, “Output expanded at the highest pace since last November, a pattern that was matched by the more forward-looking measure of new orders.”
Based on the poll, new orders increased in July, regaining the growth impetus that had been lost in June. As new export orders increased at a steady rate, international markets helped to drive the increase in overall order books, it said.
Producers of goods saw a milder increase in their costs in July. According to the poll, as per the survey. The rate of inflation decreased to an 11-month low even though the price of raw materials kept rising. The rate of increase in output prices in July was the slowest in four months, similar to input costs, it was reported.
“In July, the growth in purchasing activity edged up a notch, and firms were successful in securing inputs despite a second consecutive improvement in supplier performance.
This in turn supported a near-record rise in raw material and semi-finished goods inventories as well as a more gradual growth in input costs, according to De Lima.
Retail inflation in India was 7.01% in June, a slight decrease from May, but it was still much above than the Reserve Bank of India’s tolerance level for the sixth consecutive month. The RBI has already increased its benchmark interest rate by a total of 90 basis points since early May in an effort to control inflation, and another increase is anticipated later this week.