India’s factory activity slowed in September marginally, but remained solid, with strong demand driving business confidence to its highest level this year, S&P Global’s latest data stated on Tuesday.
The Manufacturing Purchasing Managers’ Index, compiled by S&P Global, fell to 57.5 in September from 58.6 in August. The PMI level has remained above the 50-level mark for 27 straight months.
“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.
Input costs rose mildly in September – at the weakest pace in over three years – as participants noted lower prices for aluminium and oil.
However, strong demand spurred companies to raise their selling prices. The output charges index rose, driven by higher labour costs, and the rate of increase was above its long-run average, indicating more inflation worries.
Industries saw a significant increase in new orders and production in September, which can be attributed to strong demand from both domestic and international markets. International demand expanded for the 18th consecutive month.
The report noted that the boost in demand fostered a positive outlook among businesses, leading to the highest level of business confidence in nine months.
“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,” De Lima said.
Furthermore, it encouraged companies to hire more employees, with the employment index reaching its highest point since November. Although the expansion rate remained moderate, the employment index has been above 50 for six consecutive months.
Input costs rose mildly in September – at the weakest pace in over three years – as participants noted lower prices for aluminium and oil.
However, strong demand spurred companies to raise their selling prices. The output charges index rose, driven by higher labour costs, and the rate of increase was above its long-run average, indicating more inflation worries.
In August, India’s manufacturing sector activity expanded, the S&P Global Purchasing Managers’ Index was at 58.6, in comparison to 57.7 in July. In August, the manufacturing PMI rose on the back of new orders and output increasing at the quickest rates in nearly three years.
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