The HSBC PMI data for September highlighted continued growth across India's manufacturing industry, albeit with a mild loss of momentum. New orders, output and input buying all rose at the slowest rates since May, while job creation retreated to a one-year low.
Still, companies were strongly confident regarding the outlook for production, with changes in GST (goods and services tax) rates boosting optimism. The survey indicated quicker increases in input costs and selling prices. The latter in fact rose to the greatest extent since October 2013.
At 57.7 in September, down from 59.3 in August, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) pointed to the weakest improvement in the health of the sector since May. That said, registering comfortably above the neutral mark of 50.0, the latest reading was indicative of a marked rate of expansion.
Amid reports of demand buoyancy, new business volumes rose further in September. There was a pick-up in growth of international orders at the end of the second fiscal quarter, as Indian manufacturers welcomed improvements in demand from Asia, Europe, the Americas and the Middle East.
Selling charges increased at a sharp pace, and one that was faster than that seen for input costs. Indian companies continued to signal upbeat forecasts for production in the coming 12 months.
Concurrently, buying levels rose further at the end of the second fiscal quarter. Indian goods producers also took on extra staff in September, but the rate of job creation was modest and the slowest in a year.
Indian goods producers also took on extra staff in September, but the rate of job creation was modest and the slowest in a year.
For the ninth time in ten months, manufacturers reported a fall in stocks of finished goods. On the other hand, stocks of purchases increased sharply in September.