Amid slower expansion in output and new orders, India’s manufacturing sector growth lost its momentum in the month of January, after hitting 5 year high in the previous month. As per the survey report, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI)-a composite single-figure indicator of manufacturing performance- slowed down to 52.4 in January from 54.7 in December. However, the reading signaled an expansion for the sixth consecutive month, remaining above the no-change mark of 50.0.
As per the survey report, thought the output rose to continue expansion rally to six months, rate of expansion was the weakest since October and was below the series average, in the month of January. Following the same trend, new order book volumes too increased for the third consecutive month but it also increased at slowest pace. Besides, job creation increased, owing to improved demand conditions but also at a modest pace, which was the weakest since last October. The report further said that outstanding business continued to rise during January, amid reports of delayed payments but the rate of backlog accumulation eased to a marginal pace.
On the price front, input cost inflation remained marked and broadly similar to December’s eight-month high. However, the report found that intensive competitive conditions restricted the firms to fully pass on higher cost burdens to customers, resulting in marginal output charge inflation. Further, firms increased their purchasing activity in the reported month, on the back of greater output requirements.