Mumbai, Jun 1 (IANS): India's manufacturing sector output slowed down last month due to a softer expansion in new orders and production, a key macro-economic data showed on Thursday.

The Nikkei India Manufacturing Purchasing Managers' Index (PMI), which is a composite indicator of manufacturing performance stood at 51.6 from the index reading of 52.5 reported in April 2017.

An index reading of above 50 indicates an overall increase in economic activity, and below 50 an overall decrease.

"The upturn in the Indian manufacturing sector took a step back in May, with softer demand causing lower expansions in output and the amount of new work received by firms. Moreover, there was a renewed decline in new export orders," said Pollyanna De Lima, economist at IHS Markit and the author of the report.

"Echoing a more positive tone, the PMI dataset highlighted a stronger increase in businesses' input purchasing, while optimism reached a six-month peak. Additionally, cost inflationary pressures cooled."