Amid subdued demand conditions due to negative impacts of Goods and Services tax (GST), India’s manufacturing sector growth lost its momentum in the month of October. The seasonally adjusted Nikkei India Manufacturing Purchasing Manger’s Index (PMI) - a composite single-figure indicator of manufacturing performance - slowed down to 50.3 in October from 51.2 in September, indicating stagnation in the health of the manufacturing sector. However, the reading signaled an expansion for the third consecutive month, remaining above the no-change mark of 50.0.
As per the survey report, fractional rise witnessed in output, while new export orders for Indian goods reduced in October at fastest rate since September 2013. The report further added that employment increased for the third consecutive month in October due to greater outstanding business but the increment was modest and broadly unchanged from September’s recent high.
On the inflation front, input costs remained higher by rising at the fastest pace since May, while output prices rose in October as the companies attempted to pass on higher cost burdens to clients and to protect profit margins. The report further noted that purchasing activity fell marginally for the first time in three months and the reduction also witnessed in pre-production stocks.