Manufacturing PMI edges higher to 50.7 in May 2016

NEW DELHI: Manufacturing output in India grew at its slowest pace in five months in May, suggesting that the sector is "barely improving"

The seasonally adjusted Nikkei India Manufacturing Purchasing Managers Index edged higher in May, posting 50.7 compared with 50.5 in April.

"The headline PMI remained in expansion territory, but recorded one of its lowest readings since the end of 2013, suggesting that the sector is barely improving," said the survey released Wednesday.

A reading above 50 on the index denotes expansion.

"Signs of challenging economic conditions in the Indian manufacturing sector were evident in May, with output losing further growth momentum," said Pollyanna De Lima, Economist at Markit and author of the report.

Sub sector data highlighted intermediate goods as the best performing category in May, where growth rates for new orders and output were stronger than those seen among consumer goods producers. Investment goods firms, in contrast, saw further declines in new work and production.

De Lima guided that further stimulus may be necessary to shift the economy into a higher gear since "so far, there is little evidence that the latest cut in the benchmark rate acted to significantly improve business conditions for manufacturers."