Big worry! Factory output in India slows down for 2nd month in row

India's manufacturing sector output eased for the second consecutive month in August, mainly on account of slower gains in output and decline in fresh orders, a monthly survey said.

The Nikkei India Manufacturing Purchasing Managers’ Index fell to 51.7 in August from 52.3 in July, as operating conditions improved at the slowest pace since May.

This is the 13th consecutive month that the manufacturing PMI remained above the 50-point mark. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.

“August data signalled a further loss of growth momentum across India’s manufacturing sector, reflecting slower gains in output and new orders,” said Aashna Dodhia, economist at IHS Markit and author of the report.

The PMI data suggested domestic demand conditions improved at a slower pace than the preceding month, while new export orders rose at the fastest pace since February.

Meanwhile, in response to sustained periods of expansion in output and new orders, firms were encouraged to raise their staffing levels during August.

On the price front, Indian manufacturing companies continued to face higher input costs during August. Moreover, there were reports that currency weakness contributed to higher raw material costs.

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Indian manufacturers raised their own selling prices for the thirteenth consecutive month in August.