India The growth rate in the manufacturing sector of India slowed for the second consecutive month in May. But the sector remained in a state of expansion with the highest increase in global sales i.e. exports in 13 years. This was revealed in a monthly survey released on Monday. The seasonally adjusted ‘HSBC India Manufacturing Purchasing Managers’ Index’ (PMI) declined to 57.5 in May from 58.8 in April. In March, the index had reached a 16-year high of 59.1. The HSBC India Manufacturing PMI is prepared by S&P Global on the basis of answers to questionnaires sent to purchasing managers in a group of about 400 companies.
A figure above 50 shows expansion
Under PMI, an index above 50 means expansion in production activities. Whereas a figure below 50 indicates a decline. HSBC global economist Maitreyi Das said, “The manufacturing sector remained in the expansion zone in May, although its pace was slow, due to a slowdown in new contracts and production.”
This is why growth is slow
Das said the reason for the slowdown is attributed to the reduction in working hours amid extreme heat and the increase in production costs. According to the survey, growth has been halted due to competition and election-related disruptions. Contrary to the overall sales trend, new export contracts grew at a rapid pace in May. This jump in international sales was the highest in 13 years, as manufacturers benefited from customers in many countries in Africa, Asia, America, Europe and West Asia. Also, the manufacturing sector saw the highest growth in employment since data collection began in March 2005.
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