According to S&P Global's most recent data released on Tuesday, India's factory activity experienced a slight September slowdown, although it continued to display stability. Strong demand played a pivotal role in boosting business confidence to its highest point this year.
The Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, dipped from 58.6 in August to 57.5 in September. Notably, the PMI has maintained a level above 50 for an uninterrupted 27-month period.
Pollyanna De Lima, the Economics Associate Director at S&P Global Market Intelligence, commented on the situation, stating that India's manufacturing sector exhibited mild signs of deceleration in September, primarily attributed to a more moderate increase in new orders, which in turn tempered production growth.
In September, input costs experienced a slight increase, marking the slowest rate of growth in over three years, mainly due to reduced prices for aluminum and oil, as reported by participants.
Nonetheless, robust demand encouraged businesses to raise their selling prices. The output charges index climbed, driven by elevated labor costs, and the rate of increase surpassed its historical average, signaling heightened concerns about inflation.
Industries witnessed a substantial upturn in new orders and production during September, primarily driven by strong demand from both domestic and global markets. International demand extended its expansion for the 18th consecutive month.
The report highlighted that the surge in demand had a positive impact on business sentiment, resulting in the highest level of business confidence in nine months.
"Despite this, both demand and production experienced significant increases, and companies also reported an influx of new business from clients spanning Asia, Europe, North America, and the Middle East," commented De Lima.
Additionally, this trend encouraged companies to expand their workforce, with the employment index reaching its highest level since November. While the rate of expansion remained moderate, the employment index has consistently remained above 50 for six consecutive months.
In September, input costs registered a mild increase, marking the slowest pace of growth in over three years, attributed to observations of reduced prices for aluminum and oil.
Nevertheless, robust demand prompted firms to increase their selling prices. The output charges index surged, primarily propelled by elevated labor costs, with the rate of increase surpassing its long-term average, signaling heightened concerns about inflation.
In August, India's manufacturing sector exhibited growth, as evidenced by the S&P Global Purchasing Managers' Index, which stood at 58.6, surpassing July's figure of 57.7. The upturn in the manufacturing PMI for August can be attributed to a substantial increase in new orders and output, marking the fastest rates of growth in nearly three years.
.jpg)
