Industrial Disease

The Indian manufacturing sector output growth has slowed down for the second successive month in June to its weakest level since Sep ’10. Markit compiles this index in association with HSBC.

The commentary accompanying the press release says:

 

 The momentum in the manufacturing sector slowed in June as sequential growth in output and new orders decelerated further. Even with growth easing, tight capacity is still showing up in rising backlogs of work and a lengthening in supplier delivery times. On the inflation front, input costs accelerated, while output prices rose less fast. These numbers confirm that tight capacity and monetary tightening is constraining growth. However, inflation pressures are still firmly in place, calling for further policy rate hikes to anchor inflation expectations.

In other words: brace up for more rate hikes in the near future?

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About Kaushal
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