RTTNews - India's manufacturing sector continued to expand in July, with strong improvement in business conditions, results of monthly survey by the Markit Economics revealed Monday.

The Purchasing Managers' Index for the manufacturing sector stood at 55.3 in July, unchanged from June.

A PMI reading above 50 indicates expansion in the sector, while a reading below 50 signals a contraction.

Companies enhanced input purchases and replenished their raw material stocks on further gains in output and new orders. Headcount was largely maintained indicating that manufacturers raised productivity to process new business.

Gemma Wallace, Economist at Markit said, As yet, there has been no firm recovery in the labour
market, despite rapid and sustained growth of new orders and production. The economist noted that the primary impetus to growth came from the domestic market.

Further, Wallace cited the above-neutral level of the index tracking backlogs, in three of the past four months, as evidence that capacity pressures have started building.

If these pressures continue to intensify going forward, the need to expand capacity could lead to job opportunities.

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