Manufacturing activities in India eased marginally in September but remained in good shape amid companies hiring more workers and cooling price pressures, according to a monthly survey released on Monday.
The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) indicated a strong improvement in the health of the Indian manufacturing industry, as companies stepped up production in tandem with a sustained increase in new work intakes. The PMI at 55.1 in September continued to be in expansion mode for the 15th consecutive month but was slightly lower than 56.2 recorded in August.
“Rates of expansion remained historically high, despite easing from August. To accommodate higher sales and greater output needs, firms hired extra workers and acquired more inputs. The upturn in input buying was aided by cooling price pressures. “Purchasing costs rose at the slowest pace in just under two years, while output charge inflation receded to a seven-month low,” the survey said.
A PMI score above 50 indicates expansion and a print below that level reflects contraction in manufacturing activities. Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said the latest set of PMI data shows us that the Indian manufacturing industry remains in good shape, despite considerable global headwinds and recession fears elsewhere. “There were softer, but substantial, increases in new orders and production in September, with some leading indicators suggesting that output looks set to expand further at least in the short-term as firms seek to fulfil sales contracts and replenish stocks,” De Lima noted.
Further, De Lima said input costs rose at the slowest rate in almost two years as suppliers’ stocks improved in line with subdued global demand for raw materials and recession risks. “Subsequently, Indian companies sought to restrict selling price hikes and overall charge inflation eased to a seven-month low”. The Manufacturing PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers. The panel is stratified by detailed sector and company workforce size, based on contributions to GDP.