FX.co ★ India Manufacturing Growth Slowest In 8 Months

India's manufacturing sector continued its robust expansion in September, although the growth rate dipped to an eight-month low as both output and new orders increased at a more moderate pace, according to survey findings from S&P Global unveiled on Tuesday.

The seasonally adjusted HSBC Manufacturing Purchasing Managers' Index (PMI) fell to 56.5 in September, down from 57.5 in August. However, it is important to note that a reading above 50.0 signifies expansion.

Despite facing fierce competition, new orders grew at their slowest pace so far this year. Overall growth was nevertheless bolstered by positive demand trends, successful advertising campaigns, and favorable client interest. The increase in export demand also slowed to the least rapid pace in a year and a half.

In spite of this deceleration in growth, net employment and purchase quantities rose, while business confidence remained broadly in line with its long-term average, according to the survey.

The overall expansion rate in output declined to an eight-month low in September, with growth tapering off in the consumer and capital goods sectors.

Regarding pricing, cost pressures intensified in September due to higher prices for chemicals, packaging, plastics, and metals. However, historically speaking, the rate of inflation was mild. Consequently, Indian manufacturers raised their selling prices, although the rate of inflation reduced to a five-month low, mirroring the trend observed in input costs.