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Indian manufacturing activity eases to 53.9 in June

Inflation concerns continued to dampen business confidence, with sentiment slipping to a 27-month low

Indian manufacturing activity eased in the month of June, as growth of total sales and production eased amid intense price pressures. According to the report, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) fell to 53.9 in June from 54.6 in May.

The report noted that factory orders and production rose for the twelfth straight month in June, but in both cases the rates of expansion eased to nine-month lows. Besides, new export orders rose for the third month running in June. The increase was strong by historical standards, despite easing from May's 11-year high.

On the inflation front, rates of purchase price and output charge inflation retreated to three-month lows, but remained above their respective long-run averages. Inflation concerns continued to dampen business confidence, with sentiment slipping to a 27-month low.

As per the report, employment rose for the fourth successive month, albeit at a slight pace that was broadly in line with those seen over this period. Job creation restricted backlog growth, which increased at a marginal pace that was the slowest in three months.