India’s PMI at four-month high of 51.8 in July

Some good news for India’s Manufacturing Purchasing Managers’ Index (PMI).

Pollyanna De Lima, Economist at Markit said, “India’s manufacturing economy is reviving at the beginning of the second half of 2016 after the slowdown seen in the April-June quarter, as growth of both production and new orders continues to strengthen in July. Although output expanded at the fastest rate since March and backlog accumulation intensified, businesses refrained from creating jobs. The ongoing muted trend for employment indicates that companies remain somewhat uncertain regarding the sustainability of the upturn.”

The index stood at 51.8 in July as against 51.7 in June.

Nikkei said in a statement. It said, “The performance of India’s manufacturing economy continued to improve in July, with a stronger expansion in new business contributing to faster increases in output and buying levels.”

However, Nikkei pointed out that job creation in India continues to be a worry. It said, “Although some firms added to their workforces, overall job creation was negligible.”

Nikkei said, “Posting a four-month high of 51.8 in July (June: 51.7), the seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index a composite single-figure indicator of manufacturing performance – indicated a further improvement in overall business conditions across the sector. The upward movement in the headline index came from stronger contributions from four of its five components, the exception being suppliers’ delivery times.”

The demand in domestic market rose in the month of July and total new business rose at its fastest pace since March, the data showed. “The expansion in order books was led by consumer goods producers. Growth of new export orders climbed to a six-month high, with increases seen in the consumer and capital goods categories,” it said.