New export orders spur India’s manufacturing sector in July: Survey
Increasing number of fresh export orders have led to a robust growth in India’s manufacturing sector in the past six months, a market survey said. The country’s manufacturing purchasing managers’ index (PMI)—a performance indicator of manufacturing sector—has reached 52.7%, the highest in six months, the latest Nikkei survey said. The index was 51.3% in June. The figure below 50 indicates contraction in business activity. The report said that growth of new export business accelerated in July and was the “most pronounced in five months”. A majority of respondents of the survey reported to have secured new contracts in tandem with successful price negotiations with clients. “Growth in India’s manufacturing economy rebounded in July, with the PMI rising since the prior month. This reflects stronger increases of new orders and output. Furthermore, the sector was also boosted by the quickest expansion in export orders since February,” said Pollyanna De Lima, economist at Markit and author of the report. Despite of increase in fresh orders, manufacturers hardly added manpower to enhance their productivity. “Nonetheless, the rate of job shedding was only marginal as around 96% of panellists reported no change in employment from the levels recorded in the prior month,” the report said. According to experts, the lack of addition in workforce is a reflection of manufacturers’ concern over the outlook. “Continued job shedding highlights the concern felt by businesses towards the outlook, with firms failing to increase workforce numbers to any great extent since early 2014,” De Lima said. The survey also found that the rate of inflation was only marginal in July and well below the prevailing level. This is considered a positive development, especially when the Reserve Bank of India (RBI) is expected to announce its bi-monthly monetary policy on Tuesday.
August 03, 2015 | 6:58 pm IST.