Dented by weak growth of both factory orders and production, India's manufacturing activity slowed down in the month of October. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance –slipped to a two-year low of 50.6 in October from 51.4 in September.
The survey report found that output expanded at the slowest rate in two years, on the back of subdued market demand along with competitive pressures. Besides, sales increased for the twenty-fourth consecutive month, but the upturn was the slowest over this period. Business confidence also got hit by challenging market conditions coupled with delayed client payment in October.
On the price front, lower demand for raw materials and semi-finished items led to a fall in overall cost burdens, the first in over four years. However, the decrease in input costs was fractional overall. Conversely, selling prices continued to increase in October. Although slight, the rate of charge inflation was at a seven-month high.
Further, unfinished business increased further in the reported month, amid reports of delays in the receipt of payment from clients. The rise in backlogs was the fastest since March, albeit marginal overall. As for supply chains, there was a marginal increase in lead times for inputs. However, the deterioration in vendor performance was similar to the fractional pace recorded in September.
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