Manufacturing Output of August Slowed

Slowing economy and high input costs dragged India's August manufacturing Purchasing Managers Index (PMI) to a 15-month low.

The seasonally adjusted IHS Markit India manufacturing PMI came in at 51.4 in August, its lowest since May 2018. In July, the index stood at 52.5.

An index reading of above 50 indicates overall increase compared with the previous month, and below 50 the decrease.

According to the report, despite flow of new business, the rate of expansion eased to a 15-month low.

The subdued sales to domestic and international clients in turn curbed output growth, which softened to the weakest in a year. Some survey members also reported cash-flow issues and lack of available finance.

Commenting on the latest survey, Pollyanna de Lima, Principal Economist at IHS Markit, said, "August saw an undesirable combination of slowing economic growth and greater cost inflationary pressures in the Indian manufacturing industry."

Most PMI indices moved lower, including key health-check measures for new orders, output and employment. In the last two cases, the rate of expansion was particularly weak when we look at the survey history.