PMI manufacturing: Factory output drops to 57.8 in June from 58.7 in May

According to S&P Global, the overall level of business confidence rose to a six-month high in June

India's manufacturing sector showed a slowdown in June as compared to May, a private survey showed. According to S&P Global India, the country's manufacturing Purchasing Managers' Index (PMI) fell to 57.8 in June from 58.7 in May.

A PMI higher than 50 shows an expansion in the sector.

"Indian goods producers registered a sharp increase in new work intakes during June and one that was among the strongest seen since February 2021," the report said.

The export orders rose but remained slower than in May, it added.

It also said that manufacturers lifted their selling prices in June. The rate of charge inflation was marked, the strongest in 13 months and above its long-run average. In certain cases, the upturn was attributed to higher labour and input costs.

"The surge in input buying underscored the optimism and proactive stance of manufacturers, as they sought to capitalise on favourable market conditions and obtain resources to support production growth," said Pollyanna De Lima, Economics associate director at S&P Global Market Intelligence.

"Presented with buoyant demand, manufacturers seized the opportunity to adjust their pricing strategies. The latest increase in output charges reflected firms' ability to pass on higher cost burdens to customers while maintaining a competitive edge," De Lima added.

The report said that a strong rise in sales led manufacturers to use their existing inventories of finished goods. Post-production stocks fell at the quickest pace in the year-to-date.

"Demand strength, new client enquiries and marketing efforts underpinned optimistic forecasts towards growth prospects. Moreover, the overall level of business confidence rose to a six-month high," it said.