India Manufacturing Growth Remains Strong
India’s factory activity continued to expand strongly at the start of the year despite slower rises in new orders and output amid weaker foreign demand, results of the purchasing managers’ survey from S&P Global showed on Wednesday.
The manufacturing Purchasing Managers’ Index, or PMI, dropped to 55.4 in January from December’s recent high of 57.8. However, a reading above 50 indicates expansion in the sector.
Both output and new orders grew at a slower pace in January, though they remained historically elevated. The overall upturn in sales was attributed to fruitful marketing amid resilient demand and favorable economic conditions.
Nonetheless, new export orders rose at the weakest rate in the on-going ten-month growth sequence.
In spite of companies’ efforts to expand inventories, employment levels remained relatively unchanged due to adequate capacity.
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On the price front, input price inflation accelerated to a three-month high amid rising costs for chemical, electronic components, energy, and metal and packaging costs.
Output price inflation also remained historically high, despite easing from December.
“Despite some loss of growth momentum, the sector looks set to at least remain in expansion mode as the final quarter of the current fiscal year draws to a close,” Pollyanna De Lima, economics associate director at S&P Global, said.
“Rising backlogs and the purchasing of additional inputs suggest that companies will continue to lift output in the coming months.”
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