India's manufacturing sector expanded at its quickest pace in three months in May on improved output and new orders, according to a private business survey which also showed a pick up in hiring.

The survey found increased optimism about manufacturing activity over the coming year, probably helped as Prime Minister Narendra Modi scored a dramatic election victory on a mandate of business-friendly policies and a tough stand on national security.

Almost 70% of responses were collected after exit polls showed Modi's Bharatiya Janata Party would return to power for a second term.

The <a href="https://www.wionews.com/business-economy/sensex-jumps-over-200-points-ahead-of-rbi-policy-meet-223755">Nikkei Manufacturing Purchasing Managers' Index</a> increased to 52.7 in May from April's eight-month low of 51.8, remaining above the 50-mark threshold that separates growth from contraction for a 22nd straight month.

"A revival in new order growth promoted a faster upturn in manufacturing production, as Indian firms sought to replenish inventories utilised in May to fulfil strengthening demand," Pollyanna De Lima, principal economist at IHS Markit, said in a release.

The new business orders sub-index, which tracks overall demand, rose as foreign demand increased at the fastest pace in three months. Output also grew at the strongest rate since February.

That led firms to increase the pace of hiring from the previous month when headcount was barely changed.

"To assist with higher output needs, and benefit from relatively muted cost inflation, companies stepped up hiring and input purchasing," De Lima said.

"Goods producers were also able to charge competitive prices due to negligible increases in their cost burdens, meaning not only higher sales in the domestic market, but also greater overseas demand."

Although input costs increased at a stronger pace in May, manufacturers did not pass on those pressures to customers and instead trimmed prices for the first time since December. The output prices sub-index dropped to 49.9 from 50.8.

That will help keep retail inflation muted and well below the Reserve Bank of India's 4% target, increasing the likelihood of an interest rate cut at the next policy review on June 6.

If the central bank cuts rates this week, as expected, it would mark the third consecutive easing in as many meetings.

India's manufacturing sector expanded at its quickest pace in three months in May on improved output and new orders, according to a private business survey which also showed a pick up in hiring.

India's manufacturing sector expanded at its quickest pace in three months in May on improved output and new orders, according to a private business survey which also showed a pick up in hiring. The survey found increased optimism about manufacturing activity over the coming year, probably helped as Prime Minister Narendra Modi scored a dramatic election victory on a mandate of business-friendly policies and a tough stand on national security. Almost 70% of responses were collected after exit polls showed Modi's Bharatiya Janata Party would return to power for a second term. The Nikkei Manufacturing Purchasing Managers' Index increased to 52.7 in May from April's eight-month low of 51.8, remaining above the 50-mark threshold that separates growth from contraction for a 22nd straight month. "A revival in new order growth promoted a faster upturn in manufacturing production, as Indian firms sought to replenish inventories utilised in May to fulfil strengthening demand," Pollyanna De Lima, principal economist at IHS Markit, said in a release. The new business orders sub-index, which tracks overall demand, rose as foreign demand increased at the fastest pace in three months. Output also grew at the strongest rate since February. That led firms to increase the pace of hiring from the previous month when headcount was barely changed. "To assist with higher output needs, and benefit from relatively muted cost inflation, companies stepped up hiring and input purchasing," De Lima said. "Goods producers were also able to charge competitive prices due to negligible increases in their cost burdens, meaning not only higher sales in the domestic market, but also greater overseas demand." Although input costs increased at a stronger pace in May, manufacturers did not pass on those pressures to customers and instead trimmed prices for the first time since December. The output prices sub-index dropped to 49.9 from 50.8. That will help keep retail inflation muted and well below the Reserve Bank of India's 4% target, increasing the likelihood of an interest rate cut at the next policy review on June 6. If the central bank cuts rates this week, as expected, it would mark the third consecutive easing in as many meetings.

India factory activity grows at fastest pace in three months in May: PMI

The country's manufacturing sector performance eased to an eight-month low in April as new business growth moderated, curbed by the elections and a challenging economic environment, a monthly survey showed Thursday.&nbsp;

The Nikkei India Manufacturing Purchasing Managers' Index declined from 52.6 in March to 51.8 in April, reflecting the weakest improvement in business conditions since August 2018.

This is the 21st consecutive month that the manufacturing PMI remained above the 50-point mark. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.

April PMI data indicated that softer increase in new orders restricted the growth of output, employment and business sentiment "Although remaining inside expansion territory, growth continued to soften and the fact that employment increased at the weakest pace for over a year suggests that producers are hardly gearing up for a rebound," said Pollyanna De Lima, Principal Economist at IHS Markit and author of the report, said.

When looking at reasons provided by surveyed companies for the slowdown, disruptions arising from the elections was a key theme, Lima said, adding that "firms also seem to have adopted a wait-and-see approach on their plans until public policies become clearer upon the formation of a government".

The general election, that began on April 11, is currently underway. Votes will be counted on May 23.

On the prices front, input cost inflation eased to a 43-month low while the rate of charge inflation was marginal and below its long-run average.

"With price pressures in the manufacturing economy cooling and growth losing momentum, it's increasingly likely that the RBI may cut its official rate for a third successive time in June," Lima said.

The next meeting of RBI's Monetary Policy Committee is scheduled on June 3-6.&nbsp;

The country's manufacturing sector performance eased to an eight-month low in April as new business growth moderated, curbed by the elections and a challenging economic environment, a monthly survey showed Thursday.

The country's manufacturing sector performance eased to an eight-month low in April as new business growth moderated, curbed by the elections and a challenging economic environment, a monthly survey showed Thursday. The Nikkei India Manufacturing Purchasing Managers' Index declined from 52.6 in March to 51.8 in April, reflecting the weakest improvement in business conditions since August 2018. This is the 21st consecutive month that the manufacturing PMI remained above the 50-point mark. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction. April PMI data indicated that softer increase in new orders restricted the growth of output, employment and business sentiment "Although remaining inside expansion territory, growth continued to soften and the fact that employment increased at the weakest pace for over a year suggests that producers are hardly gearing up for a rebound," said Pollyanna De Lima, Principal Economist at IHS Markit and author of the report, said. When looking at reasons provided by surveyed companies for the slowdown, disruptions arising from the elections was a key theme, Lima said, adding that "firms also seem to have adopted a wait-and-see approach on their plans until public policies become clearer upon the formation of a government". The general election, that began on April 11, is currently underway. Votes will be counted on May 23. On the prices front, input cost inflation eased to a 43-month low while the rate of charge inflation was marginal and below its long-run average. "With price pressures in the manufacturing economy cooling and growth losing momentum, it's increasingly likely that the RBI may cut its official rate for a third successive time in June," Lima said. The next meeting of RBI's Monetary Policy Committee is scheduled on June 3-6.

India's manufacturing sector growth slows in April amid election uncertainty: Purchasing Managers' Index

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India factory activity grows at fastest pace in three months in May: PMI

India's manufacturing sector growth slows in April amid election uncertainty: Purchasing Managers' Index