India's manufacturing industry showed mild signs of a slowdown in September, primarily due to a softer growth in new orders, according to a private survey.
The India Manufacturing Purchasing Managers' Index stood at 57.5 in September compared with 58.6 in August, according to S&P Global. A print above 50 means expansion, while a reading below 50 indicates contraction.
New orders, the largest sub-component of the index, rose at a softer pace in September. The latest increase was, however, sharp and historically strong, the survey said. Where an expansion in sales was reported, survey participants cited favourable demand trends, positive market dynamics and fruitful advertising.
Growth of new export orders softened from August's nine-month high, but remained sharp. Firms noted new business gains from clients in Asia, Europe, North America and the Middle East.
After quickening to a one-year high in August, the rate of inflation receded to its lowest mark in over three years. Panellists indicated paying more for copper, electronic components, foodstuff, iron and steel, but noted lower costs for aluminium and oil. Nevertheless, driven by higher labour costs and demand strength, average prices charged by Indian manufacturers rose at a solid and faster rate that outpaced its long-run average.
Output rose at the slowest pace in five months but was substantial and above the long-run series average.
Indian manufacturers were confident that output volumes would increase over the course of the coming 12 months, with the overall level of positive sentiment improving to its highest in 2023 so far. Buoyant customer appetite, advertising, and expanded capacities all boosted optimism, according to anecdotal evidence.
The positive outlook for production and demand strength fed through to another round of job creation in the manufacturing industry. Employment growth picked up since August and was strong by historical standards.
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