India’s manufacturing PMI in August drops to 52.3 vs 52.7

New Delhi: Manufacturing activity in the month of August contracted as compared to the six-month high it had touched in July. In the month, Nikkei’s manufacturing Purchasing Managers’ Index was at 52.3 compared to 52.7 recorded in July. The index, however, still indicates a growth in manufacturing in August. A figure over 50 indicates expansion, while a figure below 50 indicates contraction.

Manufacturing in the month was thwarted by slower growth in new orders and weaker growth in output. However, jobs stagnated in the month, and supplier delivery times were broadly unchanged.

Nikkei said that the indicator “pointed to a further, although weaker, improvement in the health of the sector.”

The Nikkei release said that sustained demand ensured a growth in manufacturing activity across the country, albeit at a slower pace. August’s PMI is below the long-series average. New orders however, also grew at a slower pace, indicating weaker improvements in foreign and domestic demand.

Manufacturers picked up more inventory in August, on the back of increased production requirements and to replenish stocks. Input costs were also down for the first time in six months, aiding the purchasing activity.

Buying activity in the month was up sharply, at the quickest rate in 2015. On the other hand, stock of finished goods inventories contracted at the fastest pace, since the index is being calculated.

Employment remained unchanged, on the back of relatively weak growth and uncertainty over the health of the economy. Outstanding business levels were reduced in August, indicating toward improved productivity in businesses.

Worries over the health of the Indian economy have been increasing. On Monday, GDP figures for the April-June quarter indicated that growth in the country eased to 7% compared to 7.5%.