Publication date: | Mon, 02 Jul 2018 15:15 (IST)
– The pace of job creation is highest since December 2017
– Manufacturing PMI remained above 50 . for the 11th consecutive month
New Delhi. desk
Activity in the domestic manufacturing sector was fastest so far in June this year. This performance was achieved through an increase in domestic orders and export orders.
The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) rose to 53.1 in June, marking its sharpest correction since December 2017. The index stood at 51.2 in May. This is the 11th consecutive month that the manufacturing PMI has remained above the 50 level. A PMI above 50 indicates growth, while a PMI below indicates growth.
Aashna Dodhia, economist at IHS Markit and author of the report, said: “India’s manufacturing economy grew in the April-June quarter as a result of increased demand. This was made possible by an increase in new orders and an increase in production since December last year. In order to meet the production requirements, the companies in the manufacturing sector have increased procurement activities, speeding up the employee recruitment process.
Fear of tighter monetary policy
Dodhia said the employment survey points to a better job market. The pace of new job creation has accelerated its fastest since December 2017. Cost and output price have steadily increased, indicating that the Reserve Bank of India may tighten monetary policy. Dodhia said cost inflation has been rising at the fastest pace since July 2014. This suggests that the central bank may be under pressure to tighten monetary policy.