Mumbai, Sept. 1 -- India's manufacturing sector expanded in August, but growth momentum weakened, with the HSBC India Manufacturing PMI falling to 52.8 from 53.5 in July, marking the weakest improvement in five years and below the long-run average of 54.2.

Growth in output and new orders slowed to five-year lows amid softer domestic and international demand. Export orders continued to rise, although growth eased from July.

Employment declined fractionally for the first time in two-and-a-half years, while input buying increased for the 62nd consecutive month, albeit at its slowest pace. Finished goods inventories rose for the second month as weaker-than-expected sales prompted caution.

Cost pressures also eased, with input price inflati...