Manufacturing growth slows in Oct: PMI

Growth in domestic new orders may be beginning to suffer from the impact of a drought,but stronger foreign demand was helping to cushion the blow,HSBC senior Asian economist Robert Prior-Wandesforde said.

8220;The PMI,which led the upturn in the industrial cycle,has gone essentially nowhere over the last six months. It is,however consistent with robust growth in industrial production of around 8-10 percent on an annual basis,8221; he said.

8220;If falls in the output and total new orders indices were a touch disappointing,a rise in the employment index back above 50.0 and a decent improvement in the new export orders index to its highest level since August last year offered welcome news,8221; he added.

The new orders index fell to 56.7,from September8217;s 58.3. In August,this index had touched a four-month low of 56.2.

8220;Also helpful,from a policy perspective at least,were falls in both input and output prices indices. Although early days,the latter looks to have a decent relationship with wholesale price inflation and might help calm what are clearly extremely frayed nerves at the Reserve Bank of India,8221; Prior-Wandesforde said.

The headline index had shrunk for five months through March,hitting a trough of 44.4 in December 2008.