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India’s factory output for May remained strong despite inflation woes

India’s factory output for May remained strong despite inflation woes

According to a survey, factory activity in India managed to expand at a better-than-expected rate in May as demand continued to remain resilient even as inflation gripped the country, compelling businesses to go on the highest recruitment spree since January 2020.

During the January-March quarter, Asia’s third-largest economy was found to have expanded at a 4.1% annual rate, its weakest in a year, given the growing concerns from inflating prices. Despite this, the Manufacturing Purchasing Managers’ Index of India was recorded at 54.6 in May, which is a bit lower than the 54.7 registered in April.

Even the foreign demand has risen significantly since April 2011 despite growing inflation concerns, the Russia-Ukraine war, and the overall economic slowdown in China. According to seasoned experts, the manufacturing sector in India managed to showcase sustained growth in May as several companies focused to rebuild stocks and recruit additional employees.

New employees have been hired at the quickest rate in more than two years, with unemployment rates reaching 7.8% in April as compared to 7.60% recorded in March.

It is worth noting that even though input price inflation was alleviated in May, output prices saw a considerable spike since October 2013, demonstrating that inflation is likely to remain elevated in the upcoming months. This could significantly worsen the cost-of-living crisis in some parts of the country, cited experts keeping track of the industry trends.

Meanwhile, the overall factory activity in Asia had slowed down in May as strict COVID-19 curbs in China disrupted the supply chains. Manufacturers were found to have slowed their activity in May across various Asian countries in Japan, Taiwan, and Malaysia.

Although Coronavirus lockdowns are being eased in some Chinese cities, experts believe they will continue to weigh heavily on demand and confidence among consumers as well as manufacturers.

Source Credits –

https://www.channelnewsasia.com/business/indias-may-factory-activity-remained-strong-despite-inflation-worries-2720126

About the author

Anjali Mishra

Anjali Mishra

A postgraduate in Criminal Law, Anjali Mishra uses her analytical skills to understand and write about all things market. Anjali holds a keen interest in writing insightful articles on healthcare, business, finance, and emerging technologies for AlpenHornNews and numerous other portals. Coming from outside the economical milieu, Anjali aims to write in a way that helps readers with non-technical knowledge understand technical concepts with ease.