India's manufacturing growth continues to trend higher in August
Sep 01, 2022
New Delhi [India], September 1 : A sustained improvement in demand boosted new orders for Indian manufacturers during August, which pushed manufacturing output growth to a nine-month high, a monthly survey showed.
"Production volumes were also supported by a pick-up in exports and upbeat projections for the year-ahead outlook. Firms were at their most optimistic for six years," S&P Global India Manufacturing said on Thursday.
Indian manufacturers reported the fastest increase in production in nine months, which they attributed to greater sales, and recent efforts to enhance capacities.
The seasonally adjusted index was marginally lower from July's 56.4 at 56.2 in August -- signalling the second-strongest improvement in operating conditions since last November.
The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease.
"The rate of input cost inflation softened to the weakest in a year, but the passing of higher freight, labour and material prices to clients kept the pace of increase in output prices little-changed from July," it said.
Also, the degree of optimism which was at its highest in six years and predictions of stronger sales, new enquiries and marketing efforts all boosted confidence in August, it added.
"Indian manufacturers continued to benefit from the absence of COVID-19 restrictions, with rates of growth for both output and new orders picking up yet again to the strongest since last November," said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.
"Firms welcomed the weaker increase in input costs with an upward revision to output forecasts amid renewed hopes that contained price pressures will help boost demand. Inflation concerns, which had dampened sentiment around mid-year, appear to have completely dissipated in August as seen by a jump in business confidence to a six-year high," Pollyanna De Lima added.
