During the month of September, India’s manufacturing sector witnessed a significant slowdown, marking its lowest point in five months, as indicated by the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI). This index slid from August’s 58.6 to 57.5, signifying a deceleration in manufacturing activity. It’s important to note that a PMI reading of 50 denotes a status quo in activity levels.
One of the primary factors contributing to this deceleration was a decrease in new orders compared to the previous month.
Although input cost inflation reached its lowest point in over three years, companies chose to increase their output charges at a rate surpassing the long-run average. This strategic decision may potentially have implications for future sales prospects. Companies attributed these price hikes to rising labor costs, a positive outlook on business prospects, and strong demand observed throughout September.
While the growth in new export orders softened compared to the nine-month high seen in August, it still remained at a robust level. Firms reported acquiring new business from clients spanning Asia, Europe, North America, and the Middle East.
Factory output experienced its slowest rate of growth in five months but continued to surpass the long-term average.
Despite the slowdown witnessed in various aspects of manufacturing activity, companies expressed an unprecedented level of optimism concerning their business prospects for the upcoming year in 2023.
This heightened optimism spurred a surge in employment growth compared to August, with the pace of employment expansion being deemed strong according to historical standards.