Supported by a stronger increase in new business inflows, Indian manufacturers raised production at a faster rate during June. The favourable operating environment encouraged businesses to purchase additional inputs, but was insufficient to generate jobs.

Meanwhile, cost inflation eased, while output charges were broadly unchanged. At 51.7 in June, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) - a composite single-figure indicator of manufacturing performance - pointed to a further improvement in the health of the sector. Rising from 50.7 in May, the headline index was at a three-month high.

The main contributing factors to the upward movement in the PMI were stronger rates of growth in new orders and output, both of which reached three-month highs in June. Incoming new work rose across the three broad areas of the manufacturing economy, as did production. The best-performing category was consumer goods.

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