India’s manufacturing sector activity improved in September amid firmer gains in new orders, output and employment, said in a survey released on Monday (1).
The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) strengthened slightly in September to 52.2 (up from 51.7 in August).
Sales rose from both domestic and foreign clients, while manufacturers raised their buying activity and bolstered stocks of purchases in anticipation of further growth. On the price front, input costs rose at a stronger rate amid reports of higher prices for fuel and steel. Charges were subsequently increased at a slightly firmer pace. Manufacturers remain confident that output will increase over the coming year.
However, the price pressures intensified, with the latest data showing that input costs rose to the greatest degree since June. There were reports that a strong US dollar and supply shortages had exacerbated high global prices for steel and fuel. Manufacturers passed on higher costs wherever possible via an increase in their own charges. Latest data indicated a modest, but nonetheless stronger, a rise in output prices compared to August.
Commenting on the Indian Manufacturing PMI survey data, Paul Smith, Economics Director at IHS Markit and author of the report said, “…Rising prices continued to weigh on sentiment, with confidence dropping a little to reach a three month low. Nonetheless, on balance, firms remain confident that output will continue to rise, buoyed by recent new business wins and expectations this will continue over the next 12 months.”
Underpinning the overall expansion was a firmer increase in levels of new work. Solid growth was linked to gains in both domestic and foreign demand. Indeed, export sales strengthened, with the net gain best recorded since the start of the year.
