India's manufacturing activity maintained its growth momentum as new orders and output increased at the quickest pace in nearly three years in August, according to a private survey.
The India Manufacturing Purchasing Managers' Index stood at 58.6 in August, the highest since May and up from 57.7 in July, according to IHS Markit. A print above 50 means expansion, while a reading below 50 indicates contraction.
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Demand strength was pivotal to August's robust performance, spurring the fastest upturn in new orders since January 2021, the release said. Competitive pricing and advertising were also cited as factors behind sales growth.
International sales added to manufacturers' total order books. Panel members surveyed reported having secured new work from clients in Bangladesh, China, Malaysia, Singapore, Taiwan and the US.
A healthy demand environment and favourable market conditions encouraged Indian manufacturers to step up production. Output rose for the twenty-sixth successive month, and to the greatest extent in just under three years. To keep production lines running smoothly, manufacturers purchased additional raw materials and semi-finished items in August. Buying levels rose sharply, and at one of the fastest rates seen in over 12 years.
Price signals were mixed in August, with a quicker increase in input costs contrasting with a softer uptick in factory-gate charges.
Indian manufacturers reportedly hired a combination of permanent and temporary staff, driven by new order growth. Overall employment rose at the slowest pace in four months but above the series trend.
Upward revisions to marketing budgets, better customer relations, demand strength and a healthy number of client enquiries underpinned upbeat forecasts among manufacturers regarding the year-ahead outlook for production. Although historically elevated, the overall level of positive sentiment slipped to a three-month low due to inflation concerns.
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