In October, India's manufacturing activity experienced a notable slowdown, reaching an eight-month low, primarily due to decreased demand for consumer goods, according to a survey conducted by the credit rating agency S&P Global.
The Manufacturing Purchasing Managers' Index (PMI) dropped to 55.5 in October, down from 57.5 in September. It's important to note that manufacturing is still expanding, albeit at a slower pace, as any reading above 50 indicates growth.
Several key indicators witnessed a slowdown, including total new orders, production, exports, buying levels, and stocks of purchases. Additionally, both hiring activity and business confidence declined to a five-month low in October. Cost pressures intensified, although output price inflation decreased, as reported in the survey.
S&P Global also noted that job creation in the manufacturing sector was sluggish, with less than four percent of companies hiring additional staff. This represents the slowest rate of job creation since April. Remarkably, around 95 percent of the surveyed companies maintained their existing workforce levels.
The survey's new orders index reached a one-year low, with some firms expressing concerns about the current demand for their products. The slowdown was most prominent in the consumer goods segment, which experienced notably softer increases in sales, production, exports, input inventories, and buying levels. In contrast, capital goods manufacturers saw growth in most of these aspects, except for new orders, which registered accelerated expansion.
Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, emphasized that there were signs of overall stable inflationary forces in the manufacturing sector. It appears that a modest increase in input costs was passed on to clients.
This data suggests that while manufacturing in India is still growing, the pace has moderated, with certain sectors, particularly consumer goods, experiencing more significant challenges in terms of demand and growth.
(With Agency Inputs)
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