Output in India's manufacturing sector moderated slightly in August due to slowdown in overseas shipments and domestic orders, according to a survey by HSBC holdings and Markit Economics.
The purchasing managers’ index (PMI) fell to 57.2 from 57.6, HSBC and Markit said in a statement today. A reading above 50 denotes expansion in business activity while any reading below that means contraction.
There is still plenty of fire power to come from industry even though year-on-year growth may not look as stellar as in the recent past,” Frederic Neumann, co-head of Asian economic research at HSBC, said in a statement. “Inflation continues to threaten.”
The index of new factory orders declined to 62 in August from 62.8 in July and exports slipped to 55.5 from 57.4, according to the HSBC-Markit survey.
Neumann expects the RBI to raise rates by a quarter-percentage-point at its next monetary policy announcement on Sept. 16.
The central bank said last week that controlling inflation will remain its priority as demand surges.