New Delhi, June 1 (Agency) On the back of strong demand despite a surge in inflation, India’s manufacturing output remained strong in May with Purchasing Managers’ Index (PMI) for the sector coming in at 54.6 in May as compared to 54.7 in April.A reading above 50 means expansion while the score below that reflects contraction.The private survey carried out by S&P Global said that new orders and production increased in May at similar rates to those registered in the previous month.The survey released on Wednesday said that companies were able to secure new work despite lifting selling prices at the fastest rate in over eight-and-a-half years as additional cost burdens continued to be transferred to clients.Total sales were boosted by a substantial upturn in international orders, the strongest in over 11 years.
“At 54.6 in May, little-changed from 54.7 in April, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) pointed to a sustained recovery across the sector. The above-50.0 reading was the eleventh in as many months and consistent with a solid improvement in operating conditions,” said the survey.As per the survey, the data compiled for May highlighted a notable uptick in growth of new export orders. The rate of expansion was sharp and the fastest since April 2011.Amid reports of new business gains, sustained improvements in demand and looser COVID-19 restrictions, manufacturers continued to scale up production in May.The survey said that manufacturing sector jobs rose further in May owing to ongoing improvements in sales. Although only slight, the rate of employment growth picked up to the strongest since January 2020, it added.Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence said, “India’s manufacturing sector sustained strong growth momentum in May.
Thanks in part to the sharpest rise in international sales for eleven years, total new orders expanded further. In response to demand resilience, companies continued with their efforts to rebuild stocks and hired extra workers accordingly.”De Lima further said that while firms appear to be focusing on the now, the survey’s gauge of business optimism shows a sense of unease among manufacturers.”The overall level of sentiment was the second-lowest seen for two years, with panellists generally expecting growth prospects to be harmed by acute price pressures,” said the economist.”There was little-movement in the rate of input price inflation during May, which remains historically high, but output charge inflation surged to its highest in over eight-and-a-half years as companies continued to transfer additional cost burdens to their clients,” De Lima noted.