BENGALURU: 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)