Goods producers in India see mild growth slowdown in Sept: S&P Global

Supply-chain conditions were broadly stable, which helped drag down the rate of input price inflation to its weakest in over three years. Greater labour costs, upbeat business confidence and buoyant demand facilitated a sharper increase in factory gate charges, S&P Global noted.

The seasonally adjusted S&P Global India manufacturing PMI registered 57.5 in September, down from 58.6 in August. Although the lowest for five months, the latest reading remained firmly above the no-change mark of 50 and its long-run average (53.9), therefore signalling a sharp rate of expansion.

New orders, the largest sub-component of the PMI, rose at a softer pace in the month. The rise was sharp and historically strong. Where an expansion in sales was reported, survey participants cited favourable demand trends, positive market dynamics and fruitful advertising, S&P Global said in a release.

Growth of new export orders softened from August's nine-month high, but remained sharp. Firms noted new business gains from clients in Asia, Europe, North America and the Middle East.

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.

Nevertheless, reportedly driven by higher labour costs and demand strength, average prices charged by Indian manufacturers rose at a solid and faster rate that outpaced its long-run average.

Ongoing increases in new orders continued to underpin production growth at the end of the second fiscal quarter. Output rose at the slowest pace in five months, albeit one that was substantial and above the long-run series average.

Indian manufacturers were confident that output volumes would increase over the course of the coming 12 months, with the overall level of positive sentiment improving to its highest in 2023 so far.

The positive outlook for production and demand strength fed through to another round of job creation in the manufacturing industry. Employment growth picked up since August and was strong by historical standards.

ALCHEMPro News Desk (DS)