Factory output shows signs of moderation

Indian manufacturing growth is showing signs of moderation, despite being at robust levels. The seasonally adjusted HSBC Purchasing Manager’s Index (PMI) showed a marginal decline to 57.2 in August, from 57.6 in July.

A reading above 50 in the index indicates expansion in manufacturing activities and this is the 17th month in a row when Indian manufacturing registered expansion. Despite a moderation in the rate of acceleration, the report said manufacturing growth remained above the long-run average.

Incoming new business continued to rise at a substantial pace. However, the pace slowed compared to that of July. Export business, on the rise in previous months, registered growth, at a slower pace.

However, data showed a fall in employment in the sector for a consecutive month.

Input price inflation was reported for the seventeenth month in succession, with the latest increase driven by higher raw material prices. Input prices rose a tad to 55.3 from 54.5 in July, still well below the above-60 levels recorded till May. Output prices fell further, to 52 from 52.7.