Manufacturing grew at a six-month high in July on the back of a rise in export orders, a latest survey has showed.
The Nikkei India Manufacturing PMI rose to 52.7 in July from 51.3 in June. A figure below represents contraction. Export orders grew at their fastest pace in five months.
“Growth in India’s manufacturing economy rebounded in July, with PMI rising since the prior month. This reflects stronger increases of new orders and output. Furthermore, the sector was boosted by the quickest expansion in export orders since February,” said Pollyanna De Lima, economist at Markit, which compiles the data.
The data comes a day ahead of the RBI’s monetary policy review. In its last policy review on June 2, the central bank had cut its repo, or key lending rate by 0.25 percentage points for the third time this year, to spur investment and growth.
Despite the increase, manufacturers continued to cut down on workforce in July. Around 96% of respondents reported no change in staff strength from the levels in the prior month, according to the survey.
“Although the latest data suggest that the manufacturing upturn gained traction, worries regarding the labour market persist,” Lima said, adding, “continued job shedding highlights the concern felt by businesses towards the outlook, with firms failing to increase workforce numbers to any great extent since early 2014”.
On prices, the survey said the rate of inflation was marginal.