Indian manufacturing activity slows to 9-month low in June
Indian manufacturing activity hit a nine-month low in June as growth in total sales and output slowed amid strong price pressures, a monthly survey showed on Friday.
The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) fell to 53.9 in June from 54.6 in May, the weakest pace of growth since last September.
June PMI data indicated an improvement in overall operating conditions for the twelfth consecutive month. In PMI parlance, a print above 50 signifies expansion while a score below 50 indicates contraction.
“India’s manufacturing industry ended the first quarter of FY 2022/23 on a strong footing, showing encouraging resilience in the face of strong price pressures, rising interest rates, depreciation of the rupee and a challenging geopolitical landscape,” said Pollyanna De Lima, Economics. Associate Director at S&P Global Market Intelligence.
Factory orders and production rose for the twelfth consecutive month in June, but in both cases expansion rates eased to nine-month lows. The increases were generally attributed to stronger customer demand, although some survey participants said growth was limited by acute inflationary pressures, the survey said.
According to the survey, the companies monitored reported an increase for a wide range of inputs – including chemicals, electronics, energy, metals and textiles – which they partly passed on to customers. in the form of higher selling prices.
Lima further stated that there was a general slowdown in growth in a number of measures such as factory orders, production, exports, purchase of inputs and employment, customers and companies having limited their expenses in a context of high inflation.
Inflation concerns continued to weigh on business confidence, with sentiment falling to a 27-month low, according to the survey. Elsewhere, input delivery times have shortened for the first time since the start of Covid-19.
“Less than 4% of panelists expect production growth over the coming year, while the vast majority (95%) expect no change from current levels. Inflation was the top concern for goods producers,” the survey said.
On the employment front, employment rose for the fourth consecutive month, although at a pace slightly in line with that seen over this period.
Meanwhile, the Reserve Bank of India (RBI) in its Financial Stability Report released on Thursday said persistently high inflation around the world is likely to stay longer than expected as ongoing war and sanctions weigh. economies, threatening a further slowdown in global trade volumes.
The global economic outlook is clouded by the ongoing war in Europe and the pace of monetary policy tightening by central banks in response to rising inflationary pressures, according to the RBI report.
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