Growth in India’s manufacturing sector lost momentum in October amid subdued demand conditions, survey data from IHS Markit showed Wednesday.
The Nikkei manufacturing Purchasing Managers’ Index, or PMI, dropped to 50.3 in October from 51.2 in September. However, any reading above 50 indicates expansion in the sector.
The downward movement in the headline index was partly driven by a stagnation in new business.
Panellists linked subdued demand conditions to negative impacts of GST.
Output rose only fractionally in October, while both purchasing activity and pre-production inventories decreased.
Firms raised their staffing numbers for the third straight month in October in response to greater outstanding business.
On the price front, input price inflation accelerated to a 5-month high in October. As a result, manufacturers increased their output charges to pass on higher cost burdens to clients.
“Business confidence eased to the weakest since February as some firms expressed concerns over negative GST effects,” Aashna Dodhia, Economist at IHS Markit, said.
“However, those manufacturers that were optimistic forecasted benefits of GST materialising over the next 12 months.”
Source: RTT News