Faster increases in new orders and output supported renewed job creation and inventory accumulation, while business confidence strengthened to a four-month high. The survey also showed that the average PMI for the second fiscal quarter stood at 53.8, its lowest since the same period in 2021.
S&P Global said firmer demand for textile products, food, electronic and pharmaceutical drove a sharper increase in new business intakes. The upturn in total sales was the fastest since February, while new export orders rose at a quicker pace, with surveyed firms citing stronger demand from clients in Brazil, Europe, the UAE and the US.
India’s manufacturing PMI rose to 55.1 in September from 52.8 in August, marking a seven-month high.
Stronger domestic and export demand, including for textiles, boosted new orders and output, while hiring and inventory accumulation resumed.
Business confidence reached a four-month high, although input and selling price pressures also increased.
“India’s factory sector ended the quarter on a firmer footing. The PMI rose to 55.1 in September, up from 52.8, as stronger domestic and overseas demand lifted sales and production. Hiring resumed at its fastest pace since May, and manufacturers became more optimistic about the months ahead. Companies bought more materials and built up stocks to prepare for anticipated sales. Finished-goods inventories recorded their second-largest increase in nearly 12 years, signalling a clear shift from leaner stock levels,” Pranjul Bhandari, chief India economist at HSBC, said in a press release.
The pickup in demand drove the sharpest expansion in Indian factory production for four months, according to the survey. Intermediate goods led India’s manufacturing industry in September, topping the growth rankings for both new orders and output. Capital goods was the weakest segment, posting only modest increases that were weaker than in August.
Employment growth resumed in September after a decline in momentum in the previous month, with the pace of job creation solid and the most pronounced since May. Firms also increased purchases of materials for production and inventories, and overall buying levels expanded faster than in August.
Stocks of purchases continued to rise at the end of the second fiscal quarter. S&P Global said the pace of accumulation quickened from August, was sharp, the strongest in seven months and well above its long-run average. Vendor performance improved again, though average input lead times shortened only slightly and by the least extent in three months.
Manufacturers upgraded their output forecasts in September, with positive sentiment reaching a four-month high. Surveyed firms linked optimism to new enquiries in the pipeline and expectations that demand conditions would remain favourable. In line with expected future sales growth, holdings of finished goods increased for the third consecutive month and at the second-fastest pace in 11-and-a-half years, behind July.
Price pressures also strengthened. Input cost inflation accelerated from August but remained below its long-run average, while selling prices rose at a quicker pace that was still modest and below trend. Cost pressures were strongest in intermediate goods and weakest amongst capital goods producers, while consumer goods recorded the sharpest rise in selling charges.
Fibre2Fashion News Desk (CG)
