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Business News/ News / India/  Factory PMI at 5-month low
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Factory PMI at 5-month low

The purchasing managers index fell to 57.5 in September, compared with at 58.6 in August, 57.7 in July, 57.8 in June and 58.7 in May, according to S&P Global.


NEW DELHI : India’s manufacturing activity in September grew at the slowest pace in five months after new factory orders softened from their high in August, a private survey said.

The purchasing managers index (PMI) fell to 57.5 in September, compared with at 58.6 in August, 57.7 in July, 57.8 in June and 58.7 in May, according to S&P Global.

A figure of 50 separates expansion from contraction.

“Growth of new export orders softened from August’s nine-month high, but remained sharp," the survey said.

“September data showed a let-up in the recent surge in costs faced by Indian goods producers," it said, as inflation receded to its lowest in over three years during the month.

S&P said that despite softening of new orders, Indian firms noted new business gains from clients in Asia, Europe, North America and the Middle East.

“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," said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.

“Manufacturers held a strongly positive outlook for production, as they expect demand to strengthen over the course of the coming 12 months," she said, adding that upbeat forecasts, which includes initiatives to replenish input stocks and continued job creation efforts, pointed Indian manufacturing towards a favourable trajectory.

The S&P survey pointed out that driven by higher labour costs and demand strength, average prices charged by Indian manufacturers during September rose at a solid and faster rate than previous months.

“However, while robust demand was supportive of production growth, it added to price pressures in September," De Lima said.

“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," it added.

The S&P survey said that ongoing increases in new orders continued to underpin production growth at the end of the second quarter.

“Manufacturers’ purchasing of inputs continued to grow at a robust rate that was aligned with those seen for new orders and production. This contributed to another increase in pre-production inventories," the survey said.

“Holdings of finished goods meanwhile fell further as companies reportedly fulfilled some orders directly from warehoused items," it added.

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Published: 03 Oct 2023, 10:17 PM IST
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