Manufacturing PMI eases a tad in Sept, but remains strong | The Financial Express

Manufacturing PMI eases a tad in Sept, but remains strong

They had grown 12.2% in August last year.

Manufacturing PMI eases a tad in Sept, but remains strong
For the 13th straight month to August, the services sector witnessed an expansion in output. Image: Reuters/Representational

India’s manufacturing activities eased a tad in September but the sector showed signs of strength with firms stepping up production in tandem with a sustained increase in new work intakes. Also, input cost pressures cooled.  The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) came in at 55.1 in September, indicating the sector being in expansion mode for the 15th consecutive month, though it was marginally lower than 56.2 recorded in August, which was the second-strongest improvement in operating conditions in nine months.

Government data released last week had showed that the output of eight core infrastructure sectors grew just 3.3% in August, the slowest pace in nine months and compared with 4.5% in the previous month, partly because the base effect turned unfavourable. They had grown 12.2% in August last year.

For the 13th straight month to August, the services sector witnessed an expansion in output. The services sector saw a sharp uptick in August with the relevant PMI at 57.2 on the back of stronger gains in new business, ongoing improvements in demand conditions and job creation which saw the sharpest rise in over 14 years.

“Rates of expansion (in manufacturing) 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 PMI survey said. A PMI score above 50 indicates expansion and a print below that level reflects contraction.

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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.

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,” De Lima added.

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