India\'s manufacturing activity in October slowed to eight-month low
New Delhi: With the cost pressure and muted demand for certain types of products, India's manufacturing activity in October slowed to an eight-month low of 55.5 in October as against an S&P Global Purchasing Managers’ Index (PMI) of 57.5 a month ago, and it too slipped in the second straight month in a row.
Though there was further increase in new orders, the rate of expansion was the softest in a year, with consumer goods especially affected the most, a private survey showed on Wednesday.
A print above 50 means expansion, while a reading below 50 indicates contraction. As per the S&P Global survey, there was a slower increase in total new orders, production, exports, buying levels and stocks of purchases. "Posting 55.5 in October, the index signalled an improvement in the health of the sector for the twenty-eighth month in a row. The latest reading was
above its long-run average of 53.9, but slipped from 57.5 in September to signal the slowest rate of expansion since February," it showed.
Commenting on the survey, Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said that India's manufacturing sector generated a substantial growth in October, despite a challenging the global economic environment. Still, insights from surveyed purchasing managers pointed to the deceleration of several measures.
“The survey's new orders index slipped to a one-year low, as some firms raised concerns about the current demand picture for their products. Consumer goods was behind most of the slowdown, recording considerably softer
increases in sales, production, exports, input inventories and buying levels. Growth of all of the aforementioned variables was led by capital goods makers which, with the exception of new orders, registered accelerated rates of expansion," Lima said.
"We saw further indication of broadly stable inflationary forces across the manufacturing industry. It appears that a moderate increase in input costs was simply passed on to clients. Nonetheless, the qualitative evidence from the future output question revealed an interesting finding, as reports of rising inflation expectations were expected to dent demand and subsequently production growth over the course of the coming 12 months," Lima added.
