Raw Materials: India’s manufacturing sector activity falls to 8-month low in October on softer rise in new orders: PMI
NEW DELHI: Manufacturing activities in India decelerated in October as new orders increased at the slowest pace in a year, triggering a softer rise in output and employment, a monthly survey said on Wednesday. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) slipped from 57.5 in September to 55.5 in October, the slowest rate of expansion since February. The October PMI data pointed to an improvement in overall operating conditions for the 28th straight month. In PMI parlance, a print above 50 means expansion, while a score below 50 indicates contraction. “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,” said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence. According to the survey, there were substantial, albeit slower, increases in total new orders, production, exports, buying levels and stocks of purchases. Hiring activity faded, and business confidence slipped to a five-month low. “October data signalled a deceleration in growth since September. Anecdotal evidence suggested that subdued demand for certain products and fierce competition stymied the upturn,” the survey said. On the job front, less than 4 per cent of companies hired extra staff and 95 per cent left workforce numbers unchanged. The rate of job creation was slight and the slowest since April. On the price front, cost pressures intensified, while output price inflation receded. “We saw a 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,” Lima said. Looking ahead, business sentiment remained firmly inside positive territory but slipped to a five-month low amid concerns surrounding the path for inflation and demand. The S&P Global India Manufacturing PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.