Empowering MSMEs with News & Insights

India's mfg PMI down to 48.5 in Aug; lowest in four years: Survey

Updated: Sep 02, 2013 02:15:19pm
image
New Delhi, Sept 2 (KNN) Indian manufacturing sector activity shrank for the first time in more than four years last month to 48.5 in August from 50.1 in July, according to a survey.

“The HSBC Manufacturing Purchasing Managers’ Index (PMI), compiled by Markit, sank to 48.5 in August from 50.1 in July, the lowest reading since March 2009,” said a HSBC Market press release.

According to the report, business conditions in the Indian manufacturing sector deteriorated during August for the first time in over four years, with both output and new orders falling at faster rates. Export orders also declined, ending an 11-month sequence of growth.

Amid reports of fragile economic conditions and subdued client demand, new orders placed with Indian manufacturers fell solidly in August, the release said.

Furthermore, the rate of contraction accelerated to the fastest since February 2009. Order book volumes across the intermediate goods sector decreased at a sharp and accelerated pace, while consumer goods producers registered a slight decline.

The new orders from outside fell, ending an 11-month sequence of growth, thus reflecting a weak demand from the export clients.

Consequently, Indian manufacturers reduced their production volumes for the fourth consecutive month in August and at the fastest rate in four-and-a-half years.

Output fell at both investment and intermediate goods firms, with the latter recording the sharper decline although the stocks of finished goods decreased moderately for the first time since March.

"Manufacturing activity contracted in August for the first time since March 2009. This was led by a decline in new orders, especially export orders," said chief economist for India at survey sponsor HSBC, Leif Eskesen.

The latest contraction in purchasing activity was broad-based, with all three monitored sub-sectors registering lower buying activity. Subsequently, pre-production stocks fell during the latest month. The rate of depletion was solid and the quickest in almost five years.

Encouragingly, Indian manufacturers continued to add to their workforce numbers in August. However, rates of job creation were slight across all three monitored categories, according to the release.

Prices paid for inputs by Indian manufacturers rose in August, amid reports of a weaker rupee. The rate of cost inflation remained strong, but eased since July. In an attempt to pass on part of their increased cost burden, firms raised their selling prices again.

However, competitive pressures limited manufacturers’ pricing power and charges were raised only slightly, it said. (KNN/SD)

COMMENTS

    Be first to give your comments.

LEAVE A REPLY

Required fields are marked *