Factory output growth dips in June but remains robust
NEW DELHI : Manufacturing activity last month fell for the first time since February 2023 but, supported by rising demand for Indian-made factory products, still notched up the year’s second-fastest rate of expansion, a private survey on Monday said. S&P Global said on Monday that India’s purchasing managers’ index (PMI) for manufacturing fell to 57.8 in June, down from 58.7 in May. A figure of 50 separates expansion from contraction.
However, higher inflationary pressures remained a key challenge, it 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 growth of output, employment, quantities of purchases and input stocks," said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.
“These positive developments instilled greater confidence into manufacturers regarding growth prospects, boding well for business investment and the labour market," she added. Indian manufacturers registered a sharp increase in new work projects and proposals in June—among the strongest seen since February 2021— the report said, adding that 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," the report added.
In addition, strong underlying demand stoked business confidence and optimism over the future as business activity rose to its highest this year. This prompted firms to increase their workforces for the third consecutive month. However, although the employment index was the second-highest since November, the
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