New order growth also moderated in August, reflecting weaker improvements in both domestic and foreign demand. Amid evidence of increased production requirements and efforts to replenish stocks, Indian manufacturers raised their buying levels in August. Purchasing activity grew at a sharp rate that was the quickest in 2015 so far.

There were divergences with regards to stock levels in August. Holdings of finished goods contracted at the sharpest pace in the history of the series, with survey respondents commenting on the fact that orders had been fulfilled directly from stocks. Conversely, pre-production inventories rose, led by further increases in buying activity.

Manufacturing employment was unchanged in August, with panellists indicating that hiring had been stymied by relatively weak growth and economic uncertainty. Nonetheless, companies were able to lower their levels of   outstanding business in August. Where backlogs of work fell, this was linked to productivity improvements. Reflecting lower prices paid for metals, plastics, chemicals and petroleum-based products, average costs faced by Indian manufacturers fell in August.

Although slight, the rate of reduction was the fastest since March 2009. Average tariffs were, subsequently, reduced for the first time since April. The consumer goods category outperformed the capital and intermediate goods sub-sectors in terms of growth of output, new orders and buying levels.

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