TOKYO – India’s manufacturing conditions improved in June at the strongest pace in 2018 so far, amid the sharpest gains in output and new orders.
The Nikkei India Manufacturing Purchasing Managers' Index, or PMI, rose to 53.1 in June from 51.2 in May. A reading above 50 signals an improvement, while one below 50 points to a contraction in manufacturing activity.
Favorable demand conditions, including new orders from key international markets, led to greater output. The rate of growth of manufacturing production was the most pronounced since last December. Stronger demand conditions made firms raise their staffing levels.
"India’s manufacturing economy closed the quarter on a solid footing against a backdrop of robust demand conditions,” said Aashna Dodhia, Economist at IHS Markit and author of the report. Mentioning the recent increase in interest rates of the Reserve Bank of India intended to contain inflation, Dodhia commented that “input cost inflation quickened to the strongest since July 2014 in June, suggesting that the central bank could remain under pressure to tighten monetary policy.”
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