India's manufacturing growth slowed to 55.5 in Oct, down for 2nd straight month & at 8-month low: S&P Survey

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Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, declined to an eight-month low of 55.5 in October, down from 57.5 in September, Reuters reported. This unexpected drop contradicted expectations of a rise to 57.7, as per an earlier Reuters poll. However, despite the slowdown, this marked the 28th consecutive month that the PMI remained above the 50-mark, which separates expansion from contraction.

A recent Reuters poll suggested that demand during the festive season could provide some relief to the Indian economy. However, it is not expected to significantly boost the growth of the world's fastest-growing major economy. The slowdown was particularly noticeable in the consumer goods category.

The growth in demand lost momentum, and the new orders sub-index hit its lowest point in a year. International demand expansion also slowed to a four-month low. Concerns regarding demand and inflation had a dampening effect on business confidence in October.

The future output sub-index dropped to its weakest level since May after reaching a nine-month high in September. Input prices also increased in the past month, leading companies to pass on some of the extra costs to clients. However, the rate of increase in selling prices decelerated.

Qualitative evidence indicated rising inflation expectations that are expected to impact demand and subsequent production growth over the coming 12 months, according to Pollyanna De Lima, economics associate director at S&P Global Market Intelligence. A Reuters survey forecasts that inflation will average 5.5 percent for the fiscal year ending in March 2024, easing to an average of 4.8 percent in fiscal 2025. The Reserve Bank of India (RBI) is also expected to keep its repo