India's purchasing managers' index (PMI) for manufacturing expanded for the first time in August, indicating recovery in industrial activity post continuing easing of coronavirus-led curbs ever since June.
For the month of August, manufacturing PMI came in higher at 52 as against 46 in the previous month. A number over 50 indicates expansion in output while a level below 50 indicates contraction.
"The pick-up in demand from domestic markets gave rise to upturns in production and input buying," Shreeya Patel, economist at IHS Markit said. However she asserted that not all was fine during the review period as employment scenario continued to weaken even as there was capacity pressure being faced as companies' were not able to hunt the right workers. "The rate of input price inflation was solid, following four monthly declines in cost burdens. Firms, however, continued in their efforts to drive sales amid greater competitive pressure and reduced their selling prices," she added.
Also the firm provided that growth in production during the last month has been on account of increased customers' demand for Indian goods as business operations have resumed even as lower exports continue to weigh.
For the quarter ending June of FY21, India's economy posted a record contraction of 23.9%, highlighting the damage caused by the pandemic.