The Indian manufacturing Lion roars again
India's manufacturing upturn was sustained in September, as a further increase in order books underpinned growth of output and purchasing activity. That said, rates of expansion eased in all cases. One area of strength was external demand, with firms noting the strongest rise in new export orders since July 2015. The latest PMI figures also showed an intensification of inflationary pressures. Both input costs and output charges increased at quicker rates.
Posting above the crucial 50.0 threshold for the ninth consecutive month, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers' IndexTM (PMITM) - a composite single-figure indicator of manufacturing performance - highlighted a further improvement in the health of the sector. Down from 52.6 in August to 52.1 in September, however, the latest reading indicated that growth lost some momentum.
One factor contributing to the slowdown in the sector was a softer increase in new business
inflows. Whereas improved client demand supported the upswing in order books, growth was reportedly hampered by strong competition for new work. Foreign new orders for Indian-manufactured goods expanded markedly in September, and at the quickest rate in 14 months. Panellists commented on successful price negotiations with clients.
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