October PMI at 2-year low; ‘biz confidence lowest in over 30 months’

The headline seasonally-adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) fell from 51.4 in September to a two-year low of 50.6 in October.

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Weakening demand had a domino effect in the manufacturing industry, knocking down rates of increase in production, employment and business sentiment.”

The cooling of manufacturing sector conditions in India continued in October, with both factory orders and production rising at the weakest rates for two years, a survey has said. The headline seasonally-adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) fell from 51.4 in September to a two-year low of 50.6 in October.

Subsequently, job creation softened to a six-month low, while companies were reluctant to hold excess stock and lowered input buying in response. “Meanwhile, business confidence slipped to its lowest level in over two-and-a-half years. In another sign of subdued growth conditions, input costs declined for the first time in over four years,” the survey by IHS Markit said.

Pollyanna de Lima, Principal Economist, IHS Markit, said, “PMI data for October showed a continuation of manufacturing sector weakness in India, with sales growth softening to the slowest in two years. Weakening demand had a domino effect in the manufacturing industry, knocking down rates of increase in production, employment and business sentiment.”

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On Thursday, the Centre announced that core sector output growth shrank by 5.2 per cent in September, registering its worst performance in 14 years.

“Following five successive cuts to India’s benchmark rate, and an apparent lag in how quickly this feeds through to consumers, the impending lowering of commercial lending rates could potentially revive private consumption and help to shift growth higher as we approach the year end,” de Lima said.

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