The latest Gross Domestic Product (GDP) data showed the growth of 8.2 per cent in the April-June quarter. It was said to be the fastest pace in more than two years which was driven by strong growth in manufacturing and consumer spending. But, according to a private business survey, the growth in country’s manufacturing sector unexpectedly slowed in last month (August) as domestic demand softened.
The Nikkei Manufacturing Purchasing Managers’ Index, arranged by IHS Markit, suggested a slight loss of momentum in the August month. However, Reuters analysts had expected a comeback, predicting a reading of 52.8. Despite, the rate of expansion remained strong and the PMI has not been down to the 50-mark which separates growth from contradiction since July 2017, when manufacturing mostly hit from the implementation of GST.
Total no. of orders touched three-month lows last month but the foreign demand rose at the quickest pace since February despite the global trade pressure.
A slight sign of overall inflation pressure can be seen by looking at the input prices which roses at the slowest pace since May and the rate of increases in output prices fell.
“Indian manufacturers retained positive projections for output over the next 12 months, but the level of sentiment eased in August. Indeed, some of the key headwinds facing the economy include high global oil prices, monetary policy tightening, and capital outflows from emerging markets,” IHS Market economist Ashna Dodhia said in a statement.