India's manufacturing sector growth slows in June, PMI slips to 52.1

Manufacturing sector growth slowed in June month-on-month due to softer increase in new work intakes, which translated into slower rises in output and employment, widely tracked Nikkei purchasing managers’ index (PMI) showed on Monday.

PMI was down at 52.1 points in the month, compared to three-month high of 52.7 in May, indicating a slight setback in the manufacturing sector. This is the 23rd consecutive month that the manufacturing PMI has shown a growth. In PMI parlance, a score of above 50 means expansion, while anything below that denotes contraction.

“Gauges of factory orders, production, employment and exports remained inside growth territory, but rates of expansion softened in all cases as domestic and international demand showed some signs of fading,” said Pollyanna de Lima, principal economist, IHS Markit.

According to the survey, consumer goods was the key source of growth, where robust increases in sales, output and employment were registered.

Modest expansions in production and new work were noted in the intermediate goods category, but jobs stagnated.

At the same time, operating conditions in the capital goods sector were broadly unchanged, while growth of new export orders also showed signs of weakness.