On the price front, higher raw material and freight costs led to a rise in input prices. Manufacturers were only able to pass on a part of this increase to consumers, resulting in a squeeze in manufacturing margins - Maitreyi Das, global economist, HSBC

New Delhi: India’s manufacturing sector saw a slower growth rate for the second straight month in May, but stayed firmly in expansion mode with global sales increasing to the greatest extent in over 13 years, a monthly survey said on Monday.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) fell from 58.8 in April to 57.5 in May, signaling a slower, but substantial improvement in the health of the sector. The index had climbed to a 16 year high of 59.1 in March. In PMI parlance, a print above 50 means expansion while a score below 50 denotes contraction.

According to HSBC Global Economist Maitreyi Das, “the manufacturing sector remained in expansionary territory in May, albeit the pace slowed, led by a softer rise in new orders and output.”

The slowdown was attributed to reduced working hours amid intensive heatwave and rising production costs.

“Panelists cited heatwaves as a reason for lower work hours in May, which may have affected production volumes,” Das said.