India’s Manufacturing Activity Gauge Slows To Four-Month Low In June
The Nikkei India Manufacturing Purchasing Managers’ Index stood at 50.9 in June.
India’s manufacturing activity gauge fell to a four-month low due to slower growth of factory orders and production, and uncertainties regarding the Goods and Services Tax (GST).
The Nikkei India Manufacturing Purchasing Managers’ Index (PMI)—compiled by Nikkei and research firm Markit—stood at 50.9 in June, compared to 51.6 in May. A reading below 50 indicates a contraction and a reading above it indicates expansion.
Businesses indicated that growth was held back as a reflection of water scarcity and the impending introduction of the GST.Pollyanna De Lima, Economist, IHS Markit
The landmark indirect tax regime was launched on July 1 by the Prime Minister and President of India. Businesses, however, retained mixed reactions toward GST due to uncertainty regarding future performances. This led to a slip in overall optimism to a three-month low.
On the brighter side, goods producers recorded an eight-month high in new orders from abroad. Orders in the consumer goods segment also continued to rise strongly.
Payroll and staffing numbers also rose marginally, according to Markit’s statement. Input costs were also on the rise due to higher prices of chemicals, rubber, food and plastics.