Manufacturing PMI records a four month high in June

- Advertisement -

Though industrial data for May remained bleak, HSBC’s Purchasing Managers Index (PMI) for manufacturing pointed to a slow, but consistent, improvement in factory output. The index rose to a four-month high of 55 points in June, compared with 54.8 points in May. This was primarily owing to expansion in production, along with an increased demand and new export orders, says a Business Standard report.

It would, however, be too early to consider this a recovery in manufacturing, as PMI data usually contrast with Index of Industrial Production (IIP) data. This is because PMI uses a sample different from that used by IIP. Also, it tracks the sentiment based on surveys, rather than actual production numbers. For instance, PMI for manufacturing rose from 54.7 points in March to 54.9 points in April. However, the IIP during that month grew just 0.1 per cent.

Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives at about 500 manufacturing companies.

- Advertisement -

In the PMI, a reading of more than 50 points denotes expansion, while one below that number denotes contraction. In March, the manufacturing PMI rose to 54.7 points, while the IIP contracted 3.5 per cent. The index of eight core industries grew just 3.8 per cent in May.

In June, firms recorded high demand, resulting in more new orders and expansion in output. There was a moderate rise in new export orders as well. This was in contrast to previous months, when output failed to keep up with demand, owing to power cuts.

Though power cuts remained a concern in June, a rise in workforce helped record higher output levels. “Employment expanding at a faster pace helped slow the pace of growth in backlogs,” said Leif Eskesen, chief economist (India & Asean), HSBC.

Input prices continued to rise for 39 successive months. The inflation for input products in June was sharp, and the highest since August 2011. This resulted in higher output prices, as manufacturers passed on high input costs to clients.

“Input and output prices rose at a faster pace than in May, keeping inflation high by historical standards. In light of these numbers, RBI (Reserve Bank of India) does not have a strong case for further rate cuts, as these would add to lingering inflation risks,” Eskesen said.

In the June 18 policy review, the central bank had kept key rates unchanged. Currently, RBI’s repo rate stands at eight per cent, while the cash reserve ratio is 4.75 per cent. Though wholesale price index based inflation stood at 7.5 per cent in May, consumer price index-based inflation was high at 10.36 per cent.

- Advertisement -

Related Artcles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Buzz

Analog Devices: element14’s New Distribution Partner

0
The official statement said customers can now consolidate their design requirements from a single source with a range of new technologies, products and services Strengthening...

Printed Electronics for Smart Building Solutions

0
The two companies will collaborate to scale novel water detection tape solutions based on printed electronics Sensor-maker LAIIER and Germany-based chemical and consumer goods company...

Mouser Becomes Networking Partner for IEW-22

0
Technical experts from Molex, Renesas Electronics, and Würth Electronik will be present at Mouser's booth at India Electronics Week (IEW)-2022 Mouser Electronics, a premier semiconductor...

Exclusive

Analog Devices: element14’s New Distribution Partner

0
The official statement said customers can now consolidate their design requirements from a single source with a range of new technologies, products and services Strengthening...

South Korea Gets a New Manufacturing Facility

0
The facility is to manufacture vacuum and abatement systems which are used in the global manufacturing of semiconductors.  Part of the Atlas Copco Group, the...

Printed Electronics for Smart Building Solutions

0
The two companies will collaborate to scale novel water detection tape solutions based on printed electronics Sensor-maker LAIIER and Germany-based chemical and consumer goods company...

Important Sectors

Printed Electronics for Smart Building Solutions

0
The two companies will collaborate to scale novel water detection tape solutions based on printed electronics Sensor-maker LAIIER and Germany-based chemical and consumer goods company...

India Assumes Chair of Global Partnership on AI

0
MoS Rajeev Chandrasekhar represented India at the Global Partnership on Artificial Intelligence (GPAI) Summit He believes National Data Governance Framework Policy with Indian...

ABB E-mobility Raises $200 Mn in Pre-IPO Pvt Placement

0
The company hopes to continue on its growth trajectory driven by both organic and M&A investments Zurich-based ABB E-mobility, a leading electric vehicle (EV) charging...

PMV’s EaS-E Electric Car Launched In India

0
With a top speed of 70 kmph, it claims to clock from zero to 40 kmph within five seconds. The nano-sized EV is...
Startup Funded

Spot AI: Video Intelligence Start-up Secures $40 Mn

0
The modern AI camera system maker aims to transform data from business cameras into video intelligence and accelerate its expansion Video intelligence company Spot AI...

Manufacturing

New Product Distribution Center by TI in Germany

0
The centre in Frankfurt enables same-day delivery to central Germany next-day delivery capabilities to most European-based customers.  Texas Instruments, a global semiconductor company whose presence...

Redwood to Supply High-Nickel Cathode to Panasonic

0
Despite the increasing demand, there is no cathode production at scale in North America today: Battery material maker Redwood As per the latest reports, Panasonic...
Infineon, CoolSiC

Infineon Planning New Factory in Dresden

0
The semiconductor major has enhanced its long-term financial targets after witnessing a remarkable FY22 Germany-based Infineon Technologies recently released its results for the fourth quarter...

Uno Minda To Invest Rs 400 Cr In New Light Plant

0
The plant is intended to be commissioned by Q4 FY24 The group registered its highest-ever quarterly performance recently As per the latest reports, the...

New Demonstration Facility by SASinno in Washington

0
Ant-i1 offline selective soldering machine and SELMATE-4 N2 generator are up for demonstration. SASinno that stands for “Smart and Steady Innovation”, has announced a new...