Indian manufacturing output indicated moderation of business conditions for the third consecutive month as the HSBC India Manufacturing Purchasing Managers’ Index (PMI) remained unchanged from September’s 49.6.

However, there was some positive news on the export front as foreign orders grew for the first time since July…Encouragingly, export business expanded for the first time in three months, said the report by HSBC India.

According to the report, October data indicated falling levels of production and new orders in the Indian manufacturing economy, as the business climate within India remained tough. The overall pace of growth was, however, moderate and weaker than the series average.

Consumer goods best performer

Despite reduced new orders, Indian manufacturers accumulated unfinished business in October. Backlogs of work rose at the quickest pace since July, amid evidence of power cuts. Meanwhile, buying activity fell for the third month running in October, the report highlighted.

It also observed that the consumer goods were the best performing sector in October, with production, new orders and export business rising. Conversely, intermediate goods’ growth was the worst performing category. The decline in the intermediate and capital goods categories offset growth recorded in the consumer goods sector.

Inventories rise

Inventory levels rose in October. Growth in post-production stocks accelerated to a moderate pace, while holdings of raw materials and semi-manufactured goods were accumulated for the first time in four months (although marginally).

In addition, inflationary pressures persisted in October, with input cost inflation accelerating to a 16-month peak and selling prices rising at the fastest pace since February. Manufacturers commented that the weaker rupee had led to higher prices paid for imported raw materials and that additional cost burdens were partly passed on.

beena.parmar@thehindu.co.in

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