Manufacturing in India has recorded a visible trend, hitting a three-month high in June as it found the support of stronger business orders. Nikkei Markit India Manufacturing Purchasing Managers' Index, showed a rise to 51.7 in June from 50.7 in May, amid a sharper rise in new orders.
Polyanna De Lima, economist at Markit and author of the report, said, "Indian factories registered a welcome upturn in growth of both production and new orders mid-way through 2016, but producers clearly remain stuck in a low gear. The domestic market continues to be the main growth driver, as the Indian economic upturn provides a steady stream of new business... new foreign orders rose in June following a decline in May. However, it looks as if lacklustre global demand remains a headwind for Indian manufacturers." Lima added that "rates of expansion remain weak by historical standards, with the PMI average for April-June being lower than that seen in the prior quarter."
As far as jobs are concerned, sustained growth of output and orderbooks failed to push producers to hire more. "It has been roughly three years since the sector has seen any meaningful job creation," Lima said.
RBI Governor Raghuram Rajan kept interest rates intact, in its policy review meet in June, citing rising inflationary pressure. He did however, hint at a reduction later this year with the help of a good monsoon.
