The performance of India's manufacturing economy continued to improve in July, with a stronger expansion in new business contributing to faster increases in output and buying levels. Although some firms added to their workforces, overall job creation was negligible. Meanwhile, input cost inflation softened and while output prices were raised at the quickest pace in three months, the rate of charge inflation was only slight.
Posting a four-month high of 51.8 in July (June: 51.7), the seasonally adjusted Nikkei India Manufacturing Purchasing Managers' IndexTM (PMI)TM - a composite single-figure indicator of manufacturing performance -indicated a further improvement in overall business conditions across the sector. The upward movement in the headline index came from stronger contributions from four of its five components, the exception being suppliers' delivery times.
Supported by greater demand from both the domestic and external markets, total new business rose at the fastest pace since March. The expansion in order books was led by consumer goods producers. Growth of new export orders climbed to a six-month high, with increases seen in the consumer and capital goods categories.
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