India's manufacturing sector hit a four-month high in July, on the back of a strong pickup in new business orders.
The Nikkei India Manufacturing Purchasing Managers' Index rose marginally to 51.8 in July from 51.7 in June, Nikkei and Markit said in their monthly report. Total new businesses rose at the fastest pace since March, supported by greater demand from local and foreign markets, the report added.
Input costs rose at the slowest pace in five months, raising the prospect of a rate cut by the Reserve Bank of India, Pollyanna De Lima, the economist at Markit, said in the report.
With inflation rates remaining lower than their respective long-run averages, it wouldn't be surprising to see the RBI loosening monetary policy at its August meeting in an effort to encourage investment.Pollyanna De Lima, Economist, Markit
Job creation remained negligible. Only 1 percent of surveyed companies added to their workforce.
Although output expanded at thefastest rate since March and backlog accumulationintensified, businesses refrained from creating jobs.The ongoing muted trend for employment indicatesthat companies remain somewhat uncertainregarding the sustainability of the upturn.Pollyanna De Lima, Economist, Markit
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