Manufacturing PMI drops to 55.1 in Sept 2022 ahead of festive season

New Delhi, Oct 3 (KNN) The S&P Global India Manufacturing PMI edged down to 55.1 from 56.2 in August due to moderate demand and output, according to a monthly survey released on Monday.

However, the manufacturing activities remained in good shape amid companies hiring more workers and cooling price pressures.

"The latest set of PMI data show us that the Indian manufacturing industry remains in good shape, despite considerable global headwinds and recession fears elsewhere," Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said.

New orders and production saw a substantial increase in September, with some leading indicators suggesting that output looks set to expand further at least in the short-term as firms seek to fulfil sales contracts and replenish stocks, De Lima added.

In September, purchasing costs rose at the slowest pace in just under two years, while output charge inflation receded to a seven-month low, S&P Global said.

Businesses benefited from a notable moderation in price pressures and companies sought to restrict selling price hikes and overall charge inflation eased to a seven-month low, it added.

India's key inflation rate, as measured by the Consumer Price Index, returned to 7 percent in August from July’s five-month low of 6.71 percent. The Reserve Bank of India is now just one month away from failure, with inflation having been outside the central bank's 2-6 percent tolerance range for all of 2022.

The RBI is deemed to have failed if CPI inflation is outside the 2-6 percent range for three consecutive quarters. It averaged 6.3 percent in January-March, 7.3 percent in April-June, and will exceed 6 percent again in July-September.

The central bank has raised interest rates sharply since early May to curb inflation, in line with several central banks across the globe that are rolling back pandemic-era ultra-easy policies.

Sharp rate rises by the US Federal Reserve have pummelled developed and emerging market currencies over the past several weeks. The rupee also fallen to record lows.  (KNN Bureau)