Power outages hit manufacturing hard in May
Updated: Jun 04, 2013 06:27:03pm
New Delhi, June 4 (KNN) Power shortages in almost all parts of the country which seem to have contributed significantly to the manufacturing sector getting a severe hit in May has been reflected in the HSBC Purchasing Managers Index (PMI).
The Hong Kong and Shanghai Banking Corporation (HSBC) PMI has measured the Indian manufacturing at a 50-month low.
"Economic activity in the manufacturing sector slowed further in May as output contracted in response to softer domestic orders. In addition, power outages hampered output and led to a jump in backlogs of work as businesses struggled to meet orders,” said Chief Economist for India and Association of Southeast Asian Nations (ASEAN) at HSBC global research, Leif Eskesen.
Further, reflective of weaker gains in incoming new work and persistent power outages, output decreased in May, the first decline registered since March 2009, the report said.
Suppliers’ delivery times in the Indian manufacturing sector lengthened during May, amid reports of power cuts and strikes. That said, vendor performance deteriorated to a lesser extent than in April.
Meanwhile, most of the manufacturing units in states like, Andhra Pradesh, Tamil Nadu and Maharashtra have been suffering owing to power crisis at this point.
However, order book volumes rose for the fiftieth consecutive month. But the rate of expansion was, marginal and the slowest in that sequence. Encouragingly, foreign orders rose at an accelerated pace during May.
Growth in export business was solid and the fastest since January.
Meanwhile, panellists suggested that demand was maintained, but commented on increased competition for new work and tough market conditions overall, particularly on the domestic front.
Monitored companies indicated strengthening demand from key export clients. Further, unfinished business levels increased, amid evidence of power and water shortages. Backlogs of work rose solidly and at the quickest pace in five months.
It has been observed since April 2009, buying activity in the Indian manufacturing sector rose during May. The rate of expansion, however, was moderate and the slowest recorded since September 2011.
Holdings of raw materials and semi-manufactured goods were accumulated in May. Similarly, stocks of finished goods rose the last month.
Eskesen said, inflation gauges also eased, and output prices even fell in sequential terms on the back of tougher competition and receding raw material prices. These numbers have heightened the probability that the RBI will fire another salvo at its June policy meeting.
The Reserve Bank of India (RBI) prepares for a policy meet, mid-quarter review on June 17, with the market speculating, if it will make another interest rate cut.
PMI is an indicator derived from individual diffusion indices measuring changes in output, new orders, employment, suppliers’ delivery times and stocks of purchases. (KNN)
The Hong Kong and Shanghai Banking Corporation (HSBC) PMI has measured the Indian manufacturing at a 50-month low.
"Economic activity in the manufacturing sector slowed further in May as output contracted in response to softer domestic orders. In addition, power outages hampered output and led to a jump in backlogs of work as businesses struggled to meet orders,” said Chief Economist for India and Association of Southeast Asian Nations (ASEAN) at HSBC global research, Leif Eskesen.
Further, reflective of weaker gains in incoming new work and persistent power outages, output decreased in May, the first decline registered since March 2009, the report said.
Suppliers’ delivery times in the Indian manufacturing sector lengthened during May, amid reports of power cuts and strikes. That said, vendor performance deteriorated to a lesser extent than in April.
Meanwhile, most of the manufacturing units in states like, Andhra Pradesh, Tamil Nadu and Maharashtra have been suffering owing to power crisis at this point.
However, order book volumes rose for the fiftieth consecutive month. But the rate of expansion was, marginal and the slowest in that sequence. Encouragingly, foreign orders rose at an accelerated pace during May.
Growth in export business was solid and the fastest since January.
Meanwhile, panellists suggested that demand was maintained, but commented on increased competition for new work and tough market conditions overall, particularly on the domestic front.
Monitored companies indicated strengthening demand from key export clients. Further, unfinished business levels increased, amid evidence of power and water shortages. Backlogs of work rose solidly and at the quickest pace in five months.
It has been observed since April 2009, buying activity in the Indian manufacturing sector rose during May. The rate of expansion, however, was moderate and the slowest recorded since September 2011.
Holdings of raw materials and semi-manufactured goods were accumulated in May. Similarly, stocks of finished goods rose the last month.
Eskesen said, inflation gauges also eased, and output prices even fell in sequential terms on the back of tougher competition and receding raw material prices. These numbers have heightened the probability that the RBI will fire another salvo at its June policy meeting.
The Reserve Bank of India (RBI) prepares for a policy meet, mid-quarter review on June 17, with the market speculating, if it will make another interest rate cut.
PMI is an indicator derived from individual diffusion indices measuring changes in output, new orders, employment, suppliers’ delivery times and stocks of purchases. (KNN)
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