The PMI bounce

After the Mint macro tracker, the IHS-Markit Purchasing Managers’ Index for India’s manufacturing sector suggests economic activity is picking up. The index rose for the second straight month in September to its highest in more than eight years. That a rebound in export demand helped swell order books may indicate that overseas appetite for Indian goods is recovering. If sustained, this could support our economy at a time domestic growth impulses are held back by uncertainty. Goods and services tax collections in September, reported at ₹95,480 crore, also come as a spot of encouraging news.

On a sobering note, the jump in orders did not deliver more jobs. In fact, employment levels fell for the sixth straight month. Manufacturers seem wary of enhancing their payrolls, perhaps because various indicators of a broad revival so far this fiscal year have only flattered to deceive. Right now, hopes are pinned on a burst of festive-season demand, but nobody can be too sure if the spirits lifted will translate into a durable upturn. Be it businesses or households, cash conservation is in clear evidence. Bank deposits have swollen. On money, Keynes’ precautionary motive prevails