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Manufacturing PMI dips to 15-month low in India

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Christian Fernsby ▼ | September 3, 2019
Although economic growth in the Indian manufacturing industry was sustained in August, most survey indicators fell since July to signal a widespread loss of momentum.
Manufacturing in India
Asia   Production growth and job creation were tamed in India
With sales expanding at the slowest rate in 15 months, production growth and job creation were tamed, while factories lowered input buying for the first time since May 2018.

Topics: India manufacturing

One survey indicator that moved up was the measure of input costs.

Inflation accelerated to a nine-month high, though remained moderate and below its long-run average.

The only other upward movement was seen for business confidence, which strengthened to a 16-month high.

At 51.4 in August, the seasonally adjusted IHS Markit India Manufacturing PMI signalled a further improvement in the health of the sector.

However, the headline figure was down from 52.5 in July to its lowest mark since May 2018, and below its long-run average of 53.9.

New business continued to flow in, but August saw the rate of expansion ease to a 15-month low.

Firms that noted sales growth commented on successful marketing and the receipt of orders in bulk.

Anecdotal evidence indicated that competitive pressures and challenging market conditions restricted the upturn.

New orders from overseas also increased at a slower rate in August, with growth the weakest seen since April 2018.

Subdued sales to domestic and international clients in turn curbed output growth, which softened to the weakest in a year.

Some survey members also reported cashflow problems and a lack of available finance.

Despite remaining in expansion, employment rose only marginally, and to a lesser extent than in July.

Some panellists indicated that weak sales prevented them from replacing retirees and voluntary leavers.