Factory growth rebounded in July, hiring resumed after 15 months: PMI

[ad_1]



Factory activity in India bounced back in July as demsurged both at home abroad, prompting companies to create new jobs for the first time since the onset of the pandemic, a private sector survey showed on Monday.


The Manufacturing Purchasing Managers’ Index, compiled by IHS Markit, jumped to 55.3 last month from 48.1 in June, well above 50-level separating growth from contraction.





“Output rose at a robust pace, with over one-third of companies noting a monthly expansion in production, amid a rebound in new business the easing of some local COVID-19 restrictions,” said Pollyanna De Lima, economics associate director at IHS Markit.


India grappled with a devastating second wave of coronavirus infections in April May but falling case numbers have allowed many restrictions to be eased.


The country is still reporting more than 40,000 cases per day, taking the total number of infections to around 31.6 million, but the economic re-opening induced higher demsales, leading to a sharp expansion in output.


New export orders grew at the fastest rate since April.


Employment rose for the first time since March 2020, breaking a 15-month chain of job shedding. However, the pace of hiring was mild, indicating a job crisis is still evident.


Growth in Asia’s third-largest economy could lose momentum, with new coronavirus variants posing the biggest risk to already weakened forecasts, while inflation was expected to rise, a recent Reuters poll showed.


A lack of raw material availability higher freight fees drove input costs higher, though the pace was at a seven-month low.


Despite higher input costs, output charges rose only slightly, suggesting companies absorbed the extra cost burden to boost sales stay competitive.


“With firms’ cost burdens continuing to rise, however, signs of spare capacity still evident, it’s too early to say that such a trend will be sustained in coming months,” added De Lima.


The Reserve Bank of India is not expected to raise interest rates until next fiscal year on predictions inflation remains within its target bof 2%-6% this year.

(This story has not been edited by Business Standard staff is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information commentary on developments that are of interest to you have wider political economic implications for the country the world. Your encouragement constant feedback on how to improve our offering have only made our resolve commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed updated with credible news, authoritative views incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better more relevant content. We believe in free, fair credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism subscribe to Business Standard.

Digital Editor

[ad_2]

Source link