Up marginally from 51.3 in April to 51.4 in May, the seasonally adjusted HSBC India Purchasing Managers' Index (PMI) pointed to a slight improvement in operating conditions and one that was weaker than the series average. Output rose for the seventh consecutive month in May.

That said, the rate of expansion was unchanged from the modest pace registered in April. Panellists highlighted stronger increases in new orders, although there were mentions that growth was stymied by powercuts and the elections.

The latest rise in production was broad-based by sector, with the sharpest expansion signalled by consumer goods producers. May data highlighted further rises in incoming new work, marking a seven-month sequence of expansion.

Moreover, the pace of increase accelerated to the quickest since February. Those survey respondents reporting higher new orders commented on the signing of new contracts and improved demand from both domestic and foreign clients. Growth of order book volumes was registered across the three broad areas of the manufacturing economy, led by consumer goods producers.

New orders from abroad also increased during May, thereby stretching the current period of expansion to eight months. New export business rose at a solid rate that was quicker than in April. Surveyed firms reported having benefited from favourable exchange rates.

Overseas demand improved in two of the three sub-categories, the exception being investment goods. Staffing levels were raised in May, amid evidence of increased production requirements.

Employment growth has maintained a broadly steady trend pace in the current eight-month expansionary sequence. All three monitored sub
-sectors registered higher workforce numbers.

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