India manufacturing activity rose in May despite cost pressures, PMI shows

BENGALURU, June 1 (Reuters) - India's ‌manufacturing sector expanded ​at ​its fastest pace in three months in May on sustained demand even as cost pressures were among the most intense ‌in nearly four years and business optimism softened to its ⁠lowest since February, a survey showed on Monday.

• The HSBC India Manufacturing Purchasing Managers' ‌Index (PMI), compiled by S&P Global, ‌rose to 55.0 in May from April's 54.7, higher than a preliminary estimate of 54.3

• A reading above 50.0 indicates growth

• New ​orders - a key gauge of demand - grew at the fastest rate since February, driven by civil engineering projects, competitive pricing and favourable ⁠demand conditions

• Domestic demand was the primary engine of growth, as export orders, while still expanding solidly, ​increased at their slowest pace in three months

• Factory output rose at its quickest pace in three months with ​intermediate and capital goods leading the ‌way. But consumer goods makers saw growth ease

• Hiring continued although the pace of job creation slowed from April

• ⁠Input price inflation was the second-strongest, excluding April, in roughly four years - driven by higher outlays for energy, fuel, materials and transportation, with the Middle East ⁠war cited as a contributing factor. Capital goods producers faced the sharpest cost increases ​among the three sub-sectors tracked

• Selling price inflation eased from April and remained below the rate of input cost growth as competitive pressures restrained firms from passing ‌on the full burden to customers

• Despite elevated costs manufacturers sharply increased purchasing activity - at the fastest rate ‌in three months - partly to build contingency stocks

• Business confidence fell to the ⁠lowest since February but remained ‌positive with companies expressing ​hope that cost pressures would ease, supported by strong order pipelines and marketing efforts

(Reporting by Shaloo Shrivastava; Editing by ‌Jacqueline Wong)

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