Factory output loses steam in May
Slowdown was attributed to reduced working hours amid intensive heatwave and rising production costs
image for illustrative purpose
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.
