Bad omens for India’s goods exports
Subscribe to enjoy similar stories. The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) fell to an eight-month low of 56.5 in September from 57.5 in August. A reading of 50 separates expansion from contraction.
With manufacturing growth softening throughout the September quarter, the average PMI reading slipped to its lowest since the December quarter, said the PMI survey report. The pain points: Rates of expansion in factory production and sales receded for the third straight month in September. Plus, international orders or exports rose at the slowest pace in a year-and-a half.
After a lukewarm September quarter, domestic manufacturing demand is expected to get a push from the upcoming festival season. However, no cheer is anticipated on exports amid muted global growth and geopolitical challenges. Asian exports could shift down a gear over the coming months, Nomura Global Markets Research said in a report dated 30 September.
Nomura’s leading index of Asian exports fell to 99.5 in October from 103.1 in September, registering the largest drop in 23 months. This index comprises nine components and has a three-month lead time. The sharp fall was driven by weakness in China’s imports and emerging market PMIs.
“This is in line with Germany being on the verge of a recession, still-weak China demand and the US manufacturing ISM being in contractionary territory," Nomura added. Sure, China’s recent bazooka stimulus may eventually stoke demand, but the results will take time. The problem of subdued exports is not unique to India.
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