In September, India’s manufacturing sector saw a notable slowdown, reaching a five-month low, as reported by the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI). This index slipped to 57.5 from 58.6 in August, indicating a deceleration in activity. A PMI reading of 50 represents no change in activity levels.
One of the key factors contributing to the slowdown was a decrease in new orders during September, compared to the previous month.
While input cost inflation reached its lowest point in over three years, firms raised their output charges at a pace higher than the long-run average. This decision may potentially impact future sales prospects. Firms attributed the price hikes to increased labor costs, optimistic business confidence, and robust demand observed in September.
Although the growth of new export orders softened from August’s nine-month high, it remained at a sharp level. Firms reported gaining new business from clients across Asia, Europe, North America, and the Middle East.
The output from factories grew at the slowest rate in five months but remained above the long-term average.
Despite the slowdown in various aspects of manufacturing activity, firms expressed the highest level of optimism regarding their business prospects for the year ahead in 2023.
This increased optimism prompted a surge in employment growth compared to August, with the pace of employment growth being considered strong by historical standards.
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