India's manufacturing PMI eased to 52.4 in August from 53 in July (H1 2014 average: 51.6), led by a moderation in output and new orders sub-indexes.
Overall, PMI data indicate some consolidation in manufacturing activity in August following the sharp rise in July. The trend, though, is still higher as the manufacturing PMI has averaged 52.7 in Q3 (Jul-Aug) versus 51.4 in Q2.
"We expect the manufacturing sector to continue to pick up in coming quarters, aided by steady exports, a revival in consumer discretionary demand and debottlenecking of existing investment projects. This should more than offset the drag from weak agriculture sector growth," said Sonal Varma, economist at Nomura Financial Advisory and Securities.
"Overall, we expect real GDP growth to rise to 6% y-o-y in FY15 (year ending March 2015) from 4.7% in FY14," Varma added.