New Delhi, Aug 2 (IANS): India's manufacturing sector output accelerated to the strongest growth rate in three months during July.

The headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) rose to 55.3 (index reading) in July as against a reading of 48.1 in June.

The PMI ranges between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month.

The latest reading also pointed to renewed stream of new orders, exports, quantity of purchases, and input stocks.

Furthermore, the data report by IHS Markit cited a marginal increase in employment which ended a 15-month sequence of job shedding.

However, there was softer but still sharp increase in input costs.

The report pointed out that factory orders rose amid reports of improved demand and the easing of some local Covid-19 restrictions.

"The upturn was sharp and compared with a marked decline in June. Strengthening international demand contributed to the uptick in total order books.

"New export orders expanded markedly in July, following a moderate contraction in June.

"Rising sales supported a recovery in output, which increased in July after falling for the first time in 11 months during June," it said.

The rate of production growth was sharp and outpaced its long-run average, the report added.

IHS Markit Economics Associate Director Pollyanna De Lima said: "It's encouraging to see the Indian manufacturing industry recover from the blip seen in June. Output rose at a robust pace, with over one-third of companies noting a monthly expansion in production, amid a rebound in new business and the easing of some local Covid-19 restrictions.

"Should the pandemic continue to recede, we expect a 9.7 per cent annual increase in industrial production for calendar year 2021."