Manufacturing PMI slows down for second consecutive month in Oct at 55.5
India's manufacturing PMI: The S&P report stated that growth of several measures subsided due to a slowdown in demand for certain types of products.
- Nov 1, 2023,
- Updated Nov 1, 2023 11:22 AM IST
Manufacturing PMI growth slowed down for the second month in a row at 55.5 in October from 57.5 in September, according to S&P Global India Manufacturing Purchasing Managers’ Index. S&P stated that the latest reading, although a dip from September’s, is above the long-run average of 53.9.
The report added that growth of several measures subsided due to a slowdown in demand for certain types of products. There was slower growth in total new orders, production, exports, buying level and stocks of purchases. Hiring activity faded and business confidence was at a five-month low.
Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said: "India's manufacturing sector generated substantial growth in October, despite a challenging global economic environment. Still, insights from surveyed purchasing managers pointed to the deceleration of several measures.”
De 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, 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."
The S&P report stated that output increased further at the start of the third fiscal quarter. Positive market conditions and healthy intakes of new work drove the increase in output. Growth eased to an eight-month low due to competitive pressures and weak demand at some plants.
While there has been an inflow of new orders, there has been a deceleration in growth since September manufacturing activity. “Anecdotal evidence suggested that subdued demand for certain products and fierce competition stymied the upturn. The rate of expansion was the softest in a year, with consumer goods especially affected,” it said.
Growth of international sales remained strong despite losing momentum in October. October saw the weakest growth in four months. Firms that saw an increase in new overseas orders reported gains from Asia, Europe, the Middle East and the US. This increase in new businesses has led to a growth in recruitment among goods producers.
“However, with fewer than 4% of companies hiring extra staff and 95% leaving workforce numbers unchanged, the rate of job creation was slight and the slowest since April,” it said.
Backlog of work was little-changed since September, rate of input buying growth was sharp albeit the slowest in eight months, stock trends diverged, price trends were mixed, and business sentiment remained firmly inside positive territory, but slipped to a five-month low, the report added.
Also read: Manufacturing PMI increases from 56.4 in March to 57.2 in April
Manufacturing PMI growth slowed down for the second month in a row at 55.5 in October from 57.5 in September, according to S&P Global India Manufacturing Purchasing Managers’ Index. S&P stated that the latest reading, although a dip from September’s, is above the long-run average of 53.9.
The report added that growth of several measures subsided due to a slowdown in demand for certain types of products. There was slower growth in total new orders, production, exports, buying level and stocks of purchases. Hiring activity faded and business confidence was at a five-month low.
Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said: "India's manufacturing sector generated substantial growth in October, despite a challenging global economic environment. Still, insights from surveyed purchasing managers pointed to the deceleration of several measures.”
De 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, 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."
The S&P report stated that output increased further at the start of the third fiscal quarter. Positive market conditions and healthy intakes of new work drove the increase in output. Growth eased to an eight-month low due to competitive pressures and weak demand at some plants.
While there has been an inflow of new orders, there has been a deceleration in growth since September manufacturing activity. “Anecdotal evidence suggested that subdued demand for certain products and fierce competition stymied the upturn. The rate of expansion was the softest in a year, with consumer goods especially affected,” it said.
Growth of international sales remained strong despite losing momentum in October. October saw the weakest growth in four months. Firms that saw an increase in new overseas orders reported gains from Asia, Europe, the Middle East and the US. This increase in new businesses has led to a growth in recruitment among goods producers.
“However, with fewer than 4% of companies hiring extra staff and 95% leaving workforce numbers unchanged, the rate of job creation was slight and the slowest since April,” it said.
Backlog of work was little-changed since September, rate of input buying growth was sharp albeit the slowest in eight months, stock trends diverged, price trends were mixed, and business sentiment remained firmly inside positive territory, but slipped to a five-month low, the report added.
Also read: Manufacturing PMI increases from 56.4 in March to 57.2 in April