By Priya Raghuvanshi
Copyright timesnownews
India’s manufacturing sector showed signs of losing steam in September, recording its slowest expansion in four months. However, the industry remained resilient with steady growth despite facing rising input costs and external pressures, according to a recent survey. The HSBC India Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, declined to 57.7 in September from 59.3 in August, signalling a cooling in the pace of growth, according to a Reuters report. Although readings above 50 indicate expansion, the latest figure reflects the softest improvement since May, primarily due to slower new orders and output growth. Companies pointed to fierce competitive pressures as a major obstacle. However, exports outside the US showed improvement, suggesting some offset to the impact of American tariffs. Rising Costs Push Factory Prices Higher The survey also revealed a sharp rise in input costs, with inflation hitting its highest level since May, as per the report. This surge in expenses forced manufacturers to increase their selling prices at the fastest pace seen since October 2013, intensifying pressure on profit margins. Employment growth also faltered, with only 2 per cent of companies expanding their workforce, the slowest hiring rate in a year. “New export orders increased at a faster rate in September, indicating demand outside of the US might be offsetting any decline in demand from the US as a result of tariffs,” noted Pranjul Bhandari, chief India economist at HSBC. Business Sentiment Hits Seven-Month High Despite Headwinds In a surprising development, confidence among manufacturers reached a seven-month peak in September. Firms cited recent reductions in goods and services tax (GST) rates and expectations of stronger future demand as reasons for their optimism, claims the report. Bhandari noted, “Business confidence, as indicated by expectations for future output, showed a big jump in September, potentially reflecting optimism about the boost in demand from the cuts in goods and services tax (GST), although US tariffs remain a strong headwind to the economy.”
