Indian Manufacturing: India’s manufacturing growth trend is higher as input cost inflation moderates. | So Good News

Factory activity in India remained strong in August as demand growth and import cost inflation eased, boosting output and improving business confidence. The manufacturing purchasing managers’ index compiled by S&P Global fell slightly to 56.2 in August from 56.4 in July.

It remained above the 50 mark that separates growth from contraction for the 14th consecutive month. Yields were also at a nine-month high.

“This strong performance was accompanied by the fourth consecutive decline in the monthly rate of import cost inflation to a one-year low,” noted Pollyanna De Lima, associate director of economics at S&P Global Market Intelligence.

“Welcome the increase in output to output forecasts, which included renewed price pressures. Inflation concerns, which should have boosted demand, appeared to have largely disappeared in August. Business confidence jumped to a six-year high,” he said.

Lower prices of some commodities, such as aluminum and steel, moderated inflationary pressures. However, despite being cold for the fourth month. Input cost inflation has been in line with its long-term average.

High inflation is a concern for companies, weighing on consumers’ wallets and affecting demand. Companies will further increase their selling prices, freight, Some labor and material costs were passed on to customers. However, the increase was marginal.

International demand, which has been expanding since March, rose sharply from July last month. The index rose to its highest level since August 2016 as economic sentiment improved sharply in August on strong sales forecasts.

Hiring in the manufacturing sector is still lagging.

(with agency inputs)