India's manufacturing PMI slipped to 52.3 in Augusttext_fields
New Delhi: Rising input costs along with the pandemic has slowed the growth rate of India's manufacturing output in August, suggests Manufacturing Purchasing Managers' Index (PMI) report.
India's manufacturing Purchasing Managers' Index (PMI) has slipped to 52.3 (index reading) in August as against a reading of 55.3 in July, said IHS Markit, which produces the survey-based index for India.
The latest reading pointed softer upturn in sales which led companies to pause their hiring efforts, with business confidence dampened by concerns surrounding the damaging impact of Covid-19 on-demand and firms' finances.
However, the survey report cited that with order books still expanding and businesses retaining optimistic growth projections, stock-building efforts continued and additional materials were bought.
On the price front, a softer but still sharp rise in input costs underpinned a quicker increase in charges, the report said.
"August saw a continuation of the Indian manufacturing sector recovery, but growth lost momentum as demand showed some signs of weakness due to the pandemic. Yet, factory orders and output rose across the consumer, intermediate and investment goods categories," IHS Markit's Economics Associate Director Pollyanna De Lima said.
"The 12-month outlook for production remained positive, though confidence faded amid worries concerning the lasting scars of the pandemic and the adverse impact of rising costs on companies' finances parallel to a lack of pricing power" De Lima added.
"Uncertainty regarding growth prospects, spare capacity and efforts to keep a lid on expenses led to a hiring freeze in August, following the first upturn in employment for 16 months in July" the report said.
The PMI ranges between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month.