September Manufacturing PMI At 57.5 Points To Mild Slowdown

New Delhi, Oct 3 (KNN) India's manufacturing activity expanded at the slowest pace in five months in September but remained solid, with strong demand driving business confidence to its highest level this year, according to the Manufacturing Purchasing Managers' Index, compiled by S&P Global.

The PMI fell to 57.5 last month from 58.6 in August. The September data showed a let-up in the recent surge in costs faced by Indian goods producers. After quickening to a one-year high in August, the rate of inflation receded to its lowest mark in over three years.

Pollyanna De Lima, economics associate director at S&P Global Market Intelligence said, “India's manufacturing industry showed mild signs of a slowdown in September, primarily due to a softer increase in new orders which tempered production growth. Nevertheless, both demand and output saw significant upticks, and firms also noted gains in new business from clients across Asia, Europe, North America, and the Middle East.”

“Manufacturers held a strongly positive outlook for production, as they expect demand to strengthen over the course of the coming 12 months. Upbeat forecasts continued to drive job creation efforts and initiatives to replenish input stocks. Together, these indices point towards a favourable trajectory for the Indian manufacturing industry,” she said.

However, while robust demand was supportive of production growth, it added to price pressures in September. The solid increase in output charges signalled by the PMI data, which occurred in spite of a notable retreat in cost pressures, could restrict sales in the coming months, added De Lima.

New orders, the largest sub-component of the PMI, rose at a softer pace in September. That said, the latest increase was sharp and historically strong. Where an expansion in sales was reported, survey participants cited favourable demand trends, positive market dynamics, and fruitful advertising.

Inflation in India eased in August to 6.83 per cent from July's 15-month high of 7.44 per cent but remained above the Reserve Bank of India's (RBI) target range of 2 per cent-6 per cent.  (KNN Bureau)