Manufacturing activity rebounds to a 3-month high: Survey – Times of India

NEW DELHI: Manufacturing activity in the country bounced back to a three-month high in July on the back of rising new orders, exports, quantity of purchases and input stocks helped by the lifting of curbs across the country as Covid cases moderated and economic activity resumed, a survey showed on Monday.
After slipping into contraction for the first time in 11 months during June, the IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) moved back above the critical 50-point mark in July. The headline figure was up from 48.1 in June to 55.3. The 50-point separates expansion from contraction.

The survey also showed that employment in the sector grew for the first time in 16 months, signalling the return of confidence in the sector battered earlier by the impact of the shutdown to prevent the spread of the coronavirus. The survey is compiled from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers across the country.
“It’s encouraging to see the Indian manufacturing industry recover from the blip seen in June. Output rose at a robust pace, with over one-third of companies noting a monthly expansion in production, amid a rebound in new business and the easing of some local Covid restrictions. Should the pandemic continue to recede, we expect a 9.7% annual increase in industrial production for 2021,” said Pollyanna De Lima, economics associate director at IHS Markit.
“The PMI also brought the positive news of job creation in the manufacturing sector. Although marginal, the rise in employment was the first since the onset of Covid. With firms’ cost burdens continuing to rise, however, and signs of spare capacity still evident, it’s too early to say that such a trend will be sustained in coming months,” said De Lima.
The latest PMI numbers augur well for the manufacturing sector and will be crucial for helping overall economic recovery. Growth is forecast to be in the 8-10% range, while the government is confident that it will be close to its projection of 10.5% for FY22.
Factory orders rose amid reports of improved demand and the easing of some local Covid restrictions.