PMI for September Drops to 57.7 from 59.3 in August
The September PMI data also highlighted continued growth across India's manufacturing industry, albeit with a mild loss of momentum, the survey said, adding that growth was curbed by competitive conditions
New Delhi: India’s manufacturing activity continued to expand in September, but at a slower pace as the manufacturing purchasing managers’ index (PMI) stood at 57.7, down from 59.3 in August, even though tax relief for common man has boosted business optimism for the year ahead.
The survey, conducted by the adjusted HSBC India PMI, showed that new orders, output and input buying rose at the slowest rates in four months, while job creation retreated to a one-year low. “The September headline index softened, but it remained well above the long-term average,” said Pranjul Bhandari, chief India economist at HSBC.
The September PMI data also highlighted continued growth across India's manufacturing industry, albeit with a mild loss of momentum, the survey said, adding that growth was curbed by competitive conditions. “There was a pick-up in growth of international orders at the end of the second fiscal quarter, as Indian manufacturers welcomed improvements in demand from Asia, Europe, the Americas and the Middle East,” the survey noted.
On the price front, the survey, which took place between 10 and 24 September, indicated quicker increases in input costs and selling prices. “The overall rate of inflation was solid and the quickest since May, though it remained below its long-run average,” it said.
Going ahead, the survey also noted that Indian companies continued to signal upbeat forecasts for production in the coming 12 months. Moreover, the overall level of confidence rose to a seven-month high. “New export orders increased at a faster rate in September, indicating demand outside of the US might be offsetting any decline in demand from the US as a result of tariffs,” Bhandari said.
“Business confidence, as indicated by expectations for future output, showed a big jump in September, potentially reflecting optimism about the boost in demand from the cuts in goods and services tax (GST), although US tariffs remain a strong headwind to the economy,” Bhandari added.
Monitored firms suggested that greater outlays on labour, raw materials and transportation prompted hikes to output prices, which were facilitated by positive demand trends. The rate of charge inflation reached a near 12-year high. “Companies were strongly confident regarding the outlook for production, with changes in GST rates boosting optimism,” the survey added.
