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India’s manufacturing sector grew at a softer pace in August in the backdrop of a second wave of coronavirus infections and surging costs, survey results from IHS Markit showed on Wednesday.

The headline manufacturing Purchasing Managers’ Index, or PMI, fell to 52.3 in August from 55.3 in July.

Economists had forecast a score of 55. Any reading above 50 indicates expansion in the sector.

Production and new orders rose for the second straight month, but at slower rates. New export orders increased at a slower pace in August.

Raw material shortage and transport problems led to further increase in input costs thus stretching the latest sequence to 13 months. The rate of output price inflation quickened to the highest in three months as manufacturers passed on the increased costs to clients.

Backlogs of work decreased in August and employment levels were broadly stagnant.

The 12-month outlook for production remained positive and the overall degree of optimism weakened from July.

“August saw a continuation of the Indian manufacturing sector recovery, but growth lost momentum as demand showed some signs of weakness due to the pandemic,” Pollyanna De Lima, economics associate director at IHS Markit, said.


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