India’s manufacturing sector growth decelerated for the second straight month in May but remained firmly in the expansion territory, with global sales achieving their highest increase in over 13 years, according to a survey released Monday.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) slipped to 57.5 in May from 58.8 in April, reflecting a slower yet substantial improvement in the sector’s health. This follows a 16-year high of 59.1 in March. A PMI reading above 50 indicates expansion, while below 50 signals contraction.

“The manufacturing sector stayed in expansion mode in May, albeit at a reduced pace, driven by a softer rise in new orders and output,” said HSBC Global economist Maitreyi Das.

The deceleration was attributed to reduced working hours due to an intense heatwave and rising production costs.

“Heatwaves contributed to lower work hours in May, impacting production volumes,” Das added.

Despite the slowdown, the PMI was nearly four points above its long-term average.

May’s data highlighted ongoing growth in Indian factory production, extending nearly three years of continuous expansion.

While the rate of increase slowed to a three-month low, it remained strong, bolstered by new business gains, robust demand and successful marketing efforts.

New orders grew significantly, though at the slowest pace in three months, driven by marketing initiatives, demand strength, and favourable economic conditions.

However, competition and election-related disruptions impeded growth.