Economic Slowdown: IHS Markit study finds sharp dip manufacturing activity
New Delhi, Nov 1: Amid slowing economy and rate of growth of several key sectors on a decline, an IHS Markit study has found that the increase in manufacturing hit a two year low in October.
IHS Markit India Manufacturing Purchasing Managers' Index (PMI) fell to a two-year low of 50.6 in October from 51.4 in September. This indicates that manufacturing activity in the country continued to weaken in October. The factory orders and production increased at the weakest rates in two years, a PTI report quoted the monthly survey.
The headline seasonally adjusted This indicates only a marginal improvement in the health of the manufacturing industry, the survey said.
In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction. As per the IHS Markit survey, the cooling of manufacturing sector conditions in India continued in October, with both factory orders and production rising at the weakest rates for two years.
"Subsequently, job creation softened to a six-month low, while companies were reluctant to hold excess stock and lowered input buying in response," it noted.
The PMI data for October showed a continuation of manufacturing sector weakness in India, "with sales growth softening to the slowest in two years", said Pollyanna De Lima, Principal Economist at IHS Markit.
"Weakening demand had a domino effect in the manufacturing industry, knocking down rates of increase in production, employment and business sentiment," Lima said.
With quantities of purchases contracting for the third month in a row, Lima pointed out that input costs fell for the first time in over four years during October.