New Delhi: India’s manufacturing sector grew slower for the second consecutive month in May but the sector remained in expansion with global sales rising to the highest level in 13 years, a monthly survey showed on Monday. The seasonally adjusted HSBC India manufacturing purchasing managers’ index (PMI) declined to 57.5 in May from 58.8 in April. The index had hit a 16-year high of 59.1 in March. Under the PMI, an index above 50 means expansion in production activity while a figure below 50 indicates contraction.
Maitrayee Das, global economist at HSBC, said, “The manufacturing sector remained in expansion mode in May, although its pace was slow due to a slowdown in new contracts and production.” Das said that the reason for the slowdown is attributed to the reduction in working hours amid the scorching heat and the increase in production costs. According to the survey, growth has been hampered due to competition and election-related disruptions. Contrary to the trend of overall sales, new export contracts have increased at a rapid pace in May.
International sales jumped to their highest in 13 years as manufacturers benefited from customers in a number of countries across Africa, Asia, the Americas, Europe and the Middle East. Manufacturing employment also rose to its highest level since data collection began in March 2005. The HSBC India Manufacturing PMI is compiled by S&P Global based on responses to questionnaires sent to purchasing managers at a group of about 400 companies.
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