Indian manufacturing growth eases to 3-month low in May, PMI shows
India's manufacturing growth slowed to a three-month low in May as demand softened amid price pressures and geopolitical tensions but job creation hit a record high, a survey showed on Monday.
Solid manufacturing growth has helped India's economy outperform its major peers. Asia's third-largest economy grew 7.4% last quarter from a year earlier, the fastest expansion since early 2024 and much quicker than a Reuters poll median estimate of 6.7%.
The HSBC India Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, fell to 57.6 in May from 58.2 in April, lower than a preliminary estimate of 58.3, but still well above the 50.0 level that separates growth from contraction. "India's May manufacturing PMI signalled another month of robust growth in the sector, although the rate of expansion in output and new orders eased from the previous month," said Pranjul Bhandari, chief India economist at HSBC. The expansion in new orders - a key gauge of demand - eased to a three-month low but remained historically strong, supported by healthy domestic consumption and international sales.
Output growth decelerated to its weakest pace since February, though manufacturers maintained positive sentiment about the year ahead. Job creation was one major bright spot, with manufacturers increasing hiring at the fastest pace in the survey's history, with permanent positions being created more frequently than temporary roles. "The acceleration in employment growth to a new peak is certainly a positive development," Bhandari said.
Cost pressures intensified during May, with input price inflation climbing to a six-month high. Manufacturers passed these costs on to customers, with output price inflation among the highest in over 11 years.
Growing price pressures could complicate monetary policy decisions for the Reserve Bank of India, which has already cut its key repo rate by a cumulative 50 basis points this year as overall inflation remains below the RBI's 4.0% target. The central bank is expected to cut interest rates on June 6 for a third consecutive meeting and once more in August, a Reuters poll showed last week.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
2 hours ago
- Mint
Hewlett Packard beats Q2 results estimates on AI demand; records $1.36 billion charge
(Reuters) -Hewlett Packard Enterprise beat Wall Street's second-quarter revenue and profit estimates on Tuesday, driven by demand for its artificial-intelligence servers and hybrid cloud segment. Shares of the server-maker, which also recorded an impairment charge of $1.36 billion in the reported quarter, rose 3.2% in extended trading. The company has benefited from a surge in spending on advanced data center architecture, designed to support the complex processing needs of generative AI. The GenAI boom has bumped up demand for Hewlett Packard's AI-optimized servers, which are powered by Nvidia processors and can run complex applications. For the quarter ended April 30, the company reported revenue of $7.63 billion, ahead of analysts' average estimate of $7.45 billion, according to data compiled by LSEG. In the quarter, Hewlett Packard addressed the execution challenges that it experienced in the prior quarter, which enabled it to drive improved margin performance in the server business, CFO Marie Myers said during a post-earnings call. The company did not see a significant benefit from tariff-related demand pull-forward, she said. Adjusted profit per share for the second quarter was 38 cents, beating an estimate of 32 cents per share. Server revenue was up 5.7% to $4.06 billion and revenue for the hybrid cloud segment grew 13% to $1.45 billion. Hewlett Packard tightened its annual revenue forecast growth to be up 7% to 9%, compared to its prior forecast of 7% to 11% growth. "We continue to navigate a complex macroeconomic and geopolitical landscape and remain prepared to take additional action in the back half of the year to deliver against our fiscal 2025 outlook," Myers said. The company forecast third-quarter revenue between $8.2 billion and $8.5 billion, compared to an estimate of $8.17 billion. (Reporting by Juby Babu in Mexico City; Editing by Pooja Desai)
Mint
4 hours ago
- Mint
Oil climbs 2% to 2-week high on geopolitical tensions
NEW YORK (Reuters) - Oil prices climbed about 2% on Tuesday to a two-week high as persistent geopolitical tensions between Russia and Ukraine, and the U.S. and Iran looked set to keep sanctions on both OPEC members Russia and Iran in place for longer. Brent crude futures rose $1, or 1.5%, to settle at $65.63 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 89 cents, or 1.4%, to close at $63.41. "Risk premium has ramped up this week as the prospect of a Russia/Ukraine ceasefire as well as an Iranian nuclear deal now appear to have been pushed back for weeks if not months," analysts at energy advisory firm Ritterbusch and Associates said in a note. Russia said work on trying to reach a settlement to end the war in Ukraine was extraordinarily complex and that it would be wrong to expect any imminent decisions but that it was waiting for Ukrainian reaction to its proposals. Russia is a member of the OPEC group that includes the Organization of the Petroleum Exporting Countries and allies, and was the world's second biggest producer of crude in 2024 behind only the U.S., according to U.S. energy data. OPEC member Iran, meanwhile, was set to reject a U.S. nuclear deal proposal that would be key to easing sanctions on the major oil producer. Iran was the third biggest producer of crude in OPEC behind Saudi Arabia and Iraq in 2024, according to U.S. energy data. In Canada, wildfires burning in Alberta have affected more than 344,000 barrels per day of oil sands production, or about 7% of the country's overall crude output, according to Reuters calculations. In Europe, Euro zone inflation eased below the European Central Bank's (ECB) target last month on surprisingly benign services costs, underpinning expectations for further policy easing even as global trade tensions fuel longer-term price pressures. Central banks like the ECB use interest rates to keep inflation in check. Lower interest rates can spur economic growth and demand for oil by reducing consumer borrowing costs. But, in the U.S., Chicago Federal Reserve President Austan Goolsbee said higher inflation from U.S. import tariffs could become evident quickly, but he said it would take longer to see a tariff-induced economic slowdown. The Organisation for Economic Co-operation and Development (OECD), however, revised down its forecast for global economic growth as the fallout from U.S. President Donald Trump's trade war takes a bigger toll on the U.S. economy. U.S. job openings increased in April, but layoffs posted their biggest rise in nine months, suggesting that labor market conditions were softening amid a dimming economic outlook because of tariffs. The U.S. has asked countries to make their best offers on trade negotiations by Wednesday as U.S. officials ramp up efforts to deliver multiple agreements to Trump before a self-imposed deadline just five weeks away. WEEKLY US CRUDE DRAW SEEN Analysts forecast energy firms pulled about 1.0 million barrels of crude from U.S. stockpiles last week, reducing inventories for a second week in a row. That compares with an increase of 1.2 million barrels during the same week last year and an average decrease of 2.3 million barrels over the past five years (2020-2024). The American Petroleum Institute (API) trade group and the Energy Information Administration (EIA) release weekly U.S. oil inventory data on Tuesdays and Wednesdays, respectively. [EIA/S] [API/S] (Reporting by Scott DiSavino and Alex Lawler; Additional reporting by Michele Pek and Anjana Anil; Editing by Marguerita Choy and David Gregorio)
India.com
5 hours ago
- India.com
After facing defeat against India, Pakistan to buy HQ-19 air defence system from..., is it better than S-400? Know its features
After facing defeat against India, Pakistan to buy HQ-19 air defence system from..., is it better than S-400? Know its features Islamabad: Following the faceoff with India, Pakistan is now working to strengthen its air defence capabilities. For this, Islamabad is planning to acquire China's latest HQ-19 missile defence system. As per a report by Kuala Lumpur Defense Security Asia quoting sources, the air defence system is being planned to be purchased along with 40 Chinese J-35A stealth fighter jets. The fifth-generation fighter jets are expected to reach Pakistan in the first quarter of 2026. Notably, Pakistan is planning to buy the air defence system at a time when there is dissatisfaction in the Pakistani Air Force regarding China's HQ-9 air defence. The made-in-China HQ-9 air defence system proved to be a complete failure during the faceoff with India and its missile attack in May. China's New HQ-19 Missile Defence The Dragon's HQ-19 is a ballistic missile defence system which was launched in November 2024. It has a range of 3,000 kms, mean it can protect the air space by that range. as per the Defence Security Air, deployed for long-range ballistic missiles, can be used against supersonic and near-supersonic cruise missiles such as Brahmos and Scalp-EG as well as India's Agni series of ballistic missiles. On the other hand, India already has the world's best missile defense system S-400, which has been acquired from Russia. How Does HQ-19 Works? China's Aerospace Science and Technology Corporation developed a new air defense system. This system employs a direct hit approach to neutralize incoming missiles and is deployed on an eight-wheeled vehicle carrying six missiles. It includes a command and control system and a powerful radar – Type 610A. The radar has an estimated detection range of 4000 kms. The HQ-19 began to be developed in the late 1990s. It was first tested in the year 2021. It is derived from Chinese surface-to-air missile system called HQ-9. Weaknesses of Pakistani Air Defence In May, Indian missiles successfully struck targets within Pakistan and Pakistan-occupied-Kashmir (PoK) during Operation Sindoor. This operation highlighted the apparent ineffectiveness of Pakistan's Chinese-made HQ-9 long-range and HQ-16 medium-range air defence systems, which failed to intercept the incoming missiles.
