According to a business survey, September marked an eight-month low for India’s manufacturing sector because of lower output and demand. Since June, the rate at which factories in the third-largest economy in Asia have expanded has been slowing down.
The worst level since January was recorded by the HSBC final India Manufacturing Purchasing Managers’ Index, which was also somewhat lower than the first estimate of 56.7. The reading has been over 50 since July 2021. New orders climbed at the lowest pace since December, while output was at an eight-month low.
The impact on global demand was considerably worse, as export growth slowed to levels not seen in the previous 18 months. Specifically, the proportion of businesses polled stated that foreign orders had increased by just 6 per cent in the previous three months.
Business confidence deteriorated moderately while the future output sub-index dropped to a level, which was last observed in April 2023. While input cost inflation has been on the rise since August, inflation in prices registered its lowest in five months, pointing to the fact that not all excessive price increases are being passed to the consumer due to low demand. A Reuters poll last month said price pressures would mount in the subsequent months even though inflation is below the Reserve Bank of India’s medium-term target of 4 per cent.
