Snapping two-month easing trend, business activity in Indian manufacturing sector picked up in the month of September 2018, amid firmer gains in new orders, output and employment. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - rose to 52.2 in September from 51.7 in August. This is the 14th consecutive month that the manufacturing PMI reading stood above the watershed 50 mark, which differentiates growth from contraction.
The report further highlighted that manufacturing sector saw a solid growth, on the back of gains in both domestic and foreign demand. Besides, export sales surged to its highest level since the start of the year. As per the report, high product quality helped to drive growth of new order book, while rising new work and increased production helped to drive growth of buying activity during September. Moreover, staffing levels rose for a sixth successive month and at the fastest rate since June, while backlogs of work came down slightly, the first such decline since March.
On the price front, the manufacturing companies continued to face higher input costs during September, as strong US dollar and supply shortages had exacerbated high global prices for steel and fuel. Consecutively, the firms attempt to pass on their higher cost burdens wherever possible via an increase in their own charges to the consumers. However, output prices rose at a modest rate in the reported month compared to August. Meanwhile, manufacturers remain confident that output will increase over the coming year.
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