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Manufacturing activity shows resilience as PMI rises to 55.3 | Latest News India

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Purchasing Managers’ Index (PMI) for manufacturing came in at 55.3 for the month of October, a marginal increase from the September reading of 55.1, indicating resilient manufacturing activity in India amidst a global economic slowdown.



The latest reading was “above its long-run average (53.7)” and indicated a “stronger improvement in the health of the sector”, said a release by S&P Global, the agency which conducts the survey. To be sure, PMI values in July (56.4) and August (56.2) were higher than the values in the last two months.

A PMI value above 50 signifies an expansion in economic activity over the previous month. PMI manufacturing in India has stayed above the 50 mark every month since June 2021.

“Consumer goods was the best-performing category in October”, Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence said in a statement, suggesting that festive demand might have played a big role in keeping manufacturing sector activity robust.



To be sure, there are signs in the PMI data that economic activity might be losing momentum.

“Production likewise expanded at a slower rate at the start of the third fiscal quarter, the slowest since June, albeit one that surpassed its long-run average”, the statement added.

“Looking through the details, growth in manufacturing continues to be supported, both in terms of output and new orders, which remain above 50. The ongoing festive season has been favourable for manufacturing activity, but we expect demand for discretionary consumer durables to ease, as rising interest rates, sticky inflation and moderating economic conditions take a toll on activity. So far the weakening trend in exports appears to have had limited impact on export orders, which rose at the margin in October. Perhaps the most significant improvement was in employment, which rose to its highest level since January 2020, while price pressures were broadly steady, both for inputs and output”, Rahul Bajoria, MD & Head of EM Asia (ex-China) Economics, Barclays said in a note.



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