India’s manufacturing sector grew at a faster pace in April as factories raised production in the wake of rising orders, a monthly showed on Monday.
The S&P Global factory Purchasing Managers’ Index unexpectedly rose to 54.7 in April from 54.0 in March. The expected reading was 53.8. A reading above 50.0 indicates expansion in the sector.
Growth gathered momentum in the intermediate and capital goods segments, but there was a slowdown at consumer goods makers.
The retreat of COVID-19 restrictions underpinned new order growth in April. Echoing the trend in new business, output growth quickened further. The latest growth in production took the current sequence of uninterrupted increases to ten months.
The increase in input buying was sharp and the most pronounced since last November. This contributed to a further increase in input inventories among goods producers.
Conversely, holdings of finished products continued to fall. That said, post-production inventories decreased at a moderate pace that was the weakest in over three years.
There was only a mild increase in employment during April amid negligible capacity pressures among manufacturers.
Inflationary pressures intensified in April, owing to rising commodity prices, the Russia-Ukraine war and greater transportation costs. Input prices climbed at the fastest pace in five months, and output charge inflation hit a 12-month high.
Although there was some improvement in business confidence, the overall degree of optimism remained subdued by historical standards.
Factories continued to scale up production at an above-trend pace, with the ongoing increases in sales and input purchasing suggesting that growth will be sustained in the near-term, Pollyanna De Lima, an economics associate director at S&P Global, said.