After the increase in new orders from overseas, the activities of manufacturing sector have come down to four months low in June. This information came out through a monthly survey. Nikkei India Manufacturing Purchasing Manager Index (PMI) reached level of 50.9 during the month of June. It was at 51.6 level during the month of May. Let us know that this is the weakest expansion since the survey of this year’s February month. Let us tell you that the figure above 50 indicates growth in this index, whereas it indicates contraction in production below.
Nikkei said in its release, “If you talk about the key factor in impacting PMI, then there is a soft expansion in new jobs which is the largest sub-component of the index.” It said that new orders received from consumer goods firms Continuously continued to grow, while Capital Goods Producer saw the condition of contraction during the month of May. On the other hand, foreign demand for manufactured goods in India improved in June, after which the new orders got faster improvement after October 2016.
The continuous increase in input costs continued, though the rate of inflation was modest and was in the weakest position since August 2016. Likewise, the output charges slightly increased.
It is a matter of concern, business optimism fell to the lowest level of three months. It was also found in the survey that when most manufacturers are estimating production growth in the coming 12 months, some companies felt that implementation of the goods and services tax (GST) would have a negative effect on their business.
IHS Markit’s economist and report’s author Polianna de Lima said, “The effect of the ban on bondage has come to a great extent and GST is going to affect consumers’ expenses. IHS Markets has estimated that the GDP growth will come down to 7.3% for 2017-18. “