India Manufacturing PMI Dips to 56.5 as Growth Slows for Third Consecutive Month
#IndiaManufacturingPMI #PMI #ManufacturingGrowth #India #ManufacturinginIndiaWith growth softening in the consumer and capital goods segments whilst steadying at intermediate goods makers, the overall rate of expansion retreated to an eight-month low.
October 2024 : The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) fell from 57.5 in August to 56.5 in September, highlighting a robust improvement in the health of the sector that was nonetheless the weakest since January. With manufacturing growth softening throughout the second fiscal quarter, the average PMI reading slipped to its lowest since the three months to December 2023.
September data revealed a mild setback in manufacturing growth across India. For the third straight month, rates of expansion in factory production and sales receded, both of which were at their weakest since the turn of the year but above their respective long-run averages. Notably, international orders rose at the slowest pace in a year-and-a half. Despite this loss of growth momentum, net employment and quantities of purchases rose, while business confidence was broadly aligned with its long-run average. On the price front, there were moderate increases in input costs and selling charges.
Positive demand trends, successful advertising and favourable client interest featured as the main determinants of sales growth among the qualitative part of the survey. The upturn, which was substantial but the slowest in 2024 so far, was reportedly curbed by fierce competition.
Another factor that constrained total sales growth was a softer increase in new export orders. The rate of expansion was moderate and the least pronounced in a year-and-a-half.
Factories continued to produce goods at a robust pace that outpaced the long-run series average. That said, with growth softening in the consumer and capital goods segments whilst steadying at intermediate goods makers, the overall rate of expansion retreated to an eight-month low.
Cost pressures ticked higher in September, due to increased chemical, packaging, plastic and metal prices. In historical terms, the rate of inflation was mild, however.
As a result of rising purchasing prices, as well as greater labour costs and favourable demand conditions, Indian manufacturers lifted their charges in September. The rate of inflation softened to a five-month low and was similar to that seen for input costs.
September data highlighted another substantial increase in quantities of purchases among goods producers. The rise was supported by new business growth, positive client appetite and greater production requirements. Yet, input buying expanded at the slowest pace in the calendar year to-date. Hiring growth also receded in September, reflecting a reduction in the number of part-time and temporary workers at some firms. Those that recruited extra staff cited projects in the pipeline.
The combination of job creation and slower increases in new business meant that companies were able to stay on top of their workloads. Outstanding business volumes were unchanged in September, ending an 11-month sequence of accumulation.
Inventory trends were mixed. The current sequence of falling stocks of finished goods that began more than seven years ago was stretched to September, while holdings of raw materials increased sharply again. The latter was supported by a further improvement in average lead times. Around 23 percent of Indian manufacturers forecast output growth in the year ahead, while the remaining firms predict no change. Hence, the overall level of business confidence fell to its lowest since April 2023.
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