INSUBCONTINENT EXCLUSIVE:
Orders from global markets rose at the strongest pace since February, said Aashna Dodhia, IHS Markit.BENGALURU: Factory activity grew at its
fastest pace this year in June on robust output driven by solid demand, according to a business survey that also showed input costs
increased the most in nearly four years
That points to continued strong economic activity in the quarter that ended in June, after Asia's third-largest economy grew at its quickest
pace in nearly two years in January-March.The Nikkei Manufacturing Purchasing Managers' Index, compiled by IHS Markit, rose to 53.1 in June
from May's 51.2, the highest since December
The reading has been above the 50-mark, which separates growth from contraction, for 11 consecutive months."India's manufacturing economy
closed the quarter on a solid footing against a backdrop of robust demand conditions, highlighted by the sharpest gains in output and new
orders since last December," Aashna Dodhia, an economist at IHS Markit, said.Orders from international markets rose at the strongest pace
since February, Dodhia added.IHS Markit made no mention of increasing global trade tensions, which are worrying manufacturers in many
countries.The June sub-index tracking input costs jumped to nearly a four-year high of 58.6 from May's 54.7 per cent, indicating a further
rise in inflationary pressures which manufacturing firms are at the moment reluctant to pass on entirely to customers.Retail inflation is
rising in India, and through May was above the Reserve Bank of India's medium-term target of 4 seven straight months in May
This bolsters expectations the central bank, which raised the key interest rate in June, will increase it again in August.While
manufacturing firms in June increased hiring at the fastest pace since December, concerns over rising price pressures and higher interest
rates pushed down the long-term output index - a gauge of optimism on future business - to an eight-month low."The dip in optimism partly
reflected concerns of a potential market slowdown in the year ahead," Dodhia said
Thomson Reuters 2018(Except for the headline, this story has not been edited by TheIndianSubcontinent staff and is published from a
