India’s manufacturing activity shows slight improvement in September as PMI persisted at 53.7

According to the monthly IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) survey published on October 1, manufacturing PMI persisted at 53.7 in September, upward from 52.3 in August.

In September, India’s manufacturing activity improved slightly from slow growth during August as strengthening demand situations amidst the relaxation of COVID-19 constraints increased sales. According to the monthly IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) survey published on October 1, manufacturing PMI persisted at 53.7 in September, upward from 52.3 in August.

As a result of domestic sales and international exports growing, companies increased production and acquired auxiliary inputs in September. During the previous month, the index dropped below the crucial 50.0 mark for the first time since July 2020. In PMI language, a score over 50 means enlargement, while a score under 50 indicates a decrease.

After starting 2021 on a steadier footing than in 2020, the manufacturing division has fluctuated between growing and swiftly losing growth momentum. As a result, PMI has been turbulent during 2021, growing to 55.3 in July after June’s decline to 48.1 from 50.8 in May.

While production, new orders and input marketing have proceeded to grow, but growth has deteriorated. The latest development gives optimism as output, new orders, exports, purchases, and input stocks all strengthened.

In September, consumer products were promising, posting the highest PMI reading of the three monitored market groups amidst abundant new orders and output growth accelerations. The survey revealed that aggregate manufacturing production in India increased for the third continuous month in September and at a quicker pace than that reported in August. Wherever growth was recorded, panel members indicated affirmative market circumstances and enhanced sales volumes.

The September data emphasised a slight difference in manufacturing sector employment during September, as many firms detailed agreement with government guidelines encircling shift work. The survey showed that production jobs had improved after a pause of 15 months in July. Should the pandemic continue to decrease, IHS Markit foresees a 9.7 percent annual increase in industrial production for 2021.

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