India’s manufacturing PMI slows marginally to 57.5 in September

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Manufacturing Purchasing Managers' Index, compiled by S&P Global, fell to 57.5 last month from 58.6 in August. September data showed a let-up in the recent surge in costs faced by Indian goods producers. After quickening to a one-year high in August, the rate of inflation receded to its lowest mark in over three years.

“India's manufacturing industry showed mild signs of a slowdown in September, primarily due to a softer increase in new orders which tempered production growth. Nevertheless, both demand and output saw significant upticks, and firms also noted gains in new business from clients across Asia, Europe, North America, and the Middle East," said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence. “Manufacturers held a strongly positive outlook for production, as they expect demand to strengthen over the course of the coming 12 months.

Upbeat forecasts continued to drive job creation efforts and initiatives to replenish input stocks. Together, these indices point towards a favourable trajectory for the Indian manufacturing industry," However, while robust demand was supportive of production growth, it added to price pressures in September. The solid increase in output charges signalled by the PMI data, which occurred in spite of a notable retreat in cost pressures, could restrict sales in the coming months, added De Lima.

New orders, the largest sub-component of the PMI, rose at a softer pace in September. That said, the latest increase was sharp and historically strong. Where an expansion in sales was reported, survey participants cited favourable demand trends, positive market dynamics, and fruitful advertising.