Friday March 22, 2019
Home Business India’s...

India’s October production growth falls to 22-month low: PMI

0
//

Mumbai: A leading international business survey on Monday showed decline in India’s manufacturing sector growth as it touched a 22-month low in October largely due to a slower increase in new orders.
Revealing the weakest purchasing activity since December 2013, the Nikkei India Manufacturing Purchasing Managers Index (PMI) recorded an eight-month low in October at 50.7, down from 51.2 in September and from 52.3 in August.

According to the PMI report published by financial information services provider Markit, in which a value above 50 in the reading index indicates an overall increase in manufacturing and below 50 an overall decrease, expansion in production and order books were the weakest in their current 24-month growth sequence.

“Rates of expansion in both production and order books were the weakest in their current 24-month sequences of growth, with panellists reporting challenging economic conditions and a reluctance among clients to commit to new projects,” the report said.

“PMI data for October show a further loss of growth momentum across the Indian manufacturing economy, with a slower rise in new business inflows resulting in a weaker expansion of output,” said Pollyanna De Lima, economist at Markit and the report’s author.

Despite the slowdown in new order growth, manufacturers recruited additional workers in October. Employment rose only marginally for the first time since January.

“Undeterred by tough economic conditions overall, firms took extra staff in October. This, combined with a further drop in inventories of finished goods, suggests that production growth may rebound in coming months,” Lima said.

The report said October saw inflationary pressures return to India’s manufacturing economy. Average purchase costs rose, though the rate of increase was “slight”, the survey said.

Part of the additional cost was passed on to clients by raising tariffs.

“A return to inflationary pressures, meanwhile, indicates that RBI may pause its loosening cycle for the rest of the year following a 50 basis points cut of the key repo rate in September,” Lima said.

“Upcoming survey data will show how effective the central bank’s effort to revive the economy has been,” Reserve Bank of India Governor Raghuram Rajan on September 29 cut the RBI’s repo rate, at which it lends to commercial banks, to 6.75 percent making it the third cut in the bank’s short-term lending rate this year.

The RBI has also lowered its GDP growth forecast for the current fiscal to 7.4 percent, from its earlier projection of 7.6 percent.

Under the PMI, the manufacturing sector is divided into 8 broad categories of basic metals, chemicals and plastics, electrical and optical, food and drink, mechanical engineering, textiles and clothing, timber and paper and transport.

Next Story

5G Smartphones Likely to Hit Market in April: Report

LG Electronics introduced its first 5G smartphone with a detachable secondary screen at the Mobile World Congress (MWC) Barcelona last month

0
Latest technology of 5G
5G Technology.

Premium smartphones that run on a 5G network are expected to hit the market in April, a few weeks later than their original release schedule, due to problems with parts supply and test runs, industry sources have said.

Samsung Electronics Co. is expected to release its 5G version of the Galaxy S10 either early next month or in mid-April, with LG Electronics Inc also forecast to sell the V50 ThinQ that supports 5G networks around mid-April, according to the sources, yonhap news agency reported late on Monday.

Smartphone, 5G
5G to make way in Smartphone market in April. Pixabay

Samsung Electronics unveiled its latest flagship smartphone, the Galaxy S10, along with a 5G variant during its Unpacked events held simultaneously in San Francisco and London last month.

Also Read- Samsung Galaxy S10+: Another Great Android Flagship (Tech Review)

LG Electronics introduced its first 5G smartphone with a detachable secondary screen at the Mobile World Congress (MWC) Barcelona last month. (IANS)