“India’s Manufacturing PMI for September Records Slight Dip, but Growth Remains Resilient at 57.5”
India’s manufacturing sector experienced a mild slowdown in September with a PMI reading of 57.5, down from August’s 58.6, but still reflecting robust expansion. New orders, output, and employment continued to grow, driven by positive demand trends and market dynamics.
India’s manufacturing sector displayed signs of a mild slowdown in September as the S&P Global Purchasing Managers’ Index (PMI) dipped to 57.5, down from the previous month’s reading of 58.6. While this slight decline indicates a moderation in growth, it still signifies a robust expansion in the sector.
The S&P Global PMI report revealed that goods producers in India reported a marginal deceleration in growth during September. However, this was counterbalanced by a notable increase in new orders, which supported ongoing expansions in output, input purchasing, and employment levels.
The largest sub-component of the PMI, new orders, grew at a slightly slower pace in September, although it remained sharp and historically strong. Survey participants attributed this expansion to favorable demand trends, positive market dynamics, and effective advertising strategies.
Despite the dip, the PMI report highlighted that Indian companies witnessed a significant increase in new export orders, albeit at a slower rate compared to the nine-month high recorded in August. The decrease in export order growth, though noticeable, still signifies substantial overseas demand for Indian goods.
In terms of costs, recent data indicated a moderation in the surge of expenses faced by Indian goods producers. The inflation rate, which had reached a one-year high in August, has now decreased to its lowest point in over three years. Panellists mentioned increased costs for copper, electronic components, foodstuff, iron, and steel, while also noting lower costs for aluminium and oil.
Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, commented on the PMI results, stating, “India’s manufacturing industry showed mild signs of a slowdown in September, primarily due to a softer increase in new orders which tempered production growth. Nevertheless, both demand and output saw significant upticks, and firms also noted gains in new business from clients across Asia, Europe, North America, and the Middle East.”
She emphasized that despite the slight dip, the PMI reading remained well above the no-change mark of 50.0 and its long-term average (53.9), signaling a sharp rate of expansion.
This economic update follows the recent news of India’s fiscal deficit reaching 36% of the full-year target by August-end for the fiscal year 2023-24, reflecting higher deficit levels compared to the previous year’s corresponding period. Additionally, August’s Eight Core Industries’ growth numbers indicated a 14-month high in the core sector’s growth.
Based on these statistics, it appears that Indian manufacturers and their suppliers did not face significant pressure, as average delivery times did not noticeably increase. This trend follows six months of improved vendor performance, with backlogs at goods producers reducing to some extent.
Despite the slight moderation in the manufacturing PMI, the sector continues to showcase resilience and growth potential, suggesting that India’s economic landscape remains dynamic and adaptable in the face of changing circumstances.
Sources By Agencies
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