India's manufacturing sector growth eased marginally in May as acute cost pressures offset the boost from strong growth in orders and output, survey results from S&P Global showed Wednesday.
The S&P Global factory Purchasing Managers' Index unexpectedly fell to 54.6 in May from 54.7 in April.
Economists had expected a reading of 54.2. A reading above 50.0 indicates expansion in the sector. The sector expanded for the eleventh month.
The total new order growth remained strong in May and new business increased as the Covid-19 restrictions loosened. Export orders grew at the fastest pace since April 2011. Output growth also remained robust, similar to April.
Output prices continued to increase at the fastest rate in over eight-and-a-half years as firms passed on the cost burden to clients.
Input costs rose for the twenty-second straight month. Companies reported higher prices for electronic components, energy, freight, foodstuff, metals and textiles.
Input purchasing increased to the current sequence of expansion to eleven months and suppliers delivery time lengthened.
The holdings of finished products continued to decline to the slowest in the current fifty-eight-month sequence of depletion.
The rate of employment growth, though modest, was the strongest since January 2020.
Business sentiment weakened on inflation concerns in May, with the overall level of confidence being the second-lowest in over two years.
"While firms appear to be focusing on the now, the survey's gauge of business optimism shows a sense of unease among manufacturers," Pollyanna De Lima, economics associate director at S&P Global Market Intelligence, said.
