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Notably, international orders increased at the slowest pace in a year and a half. Despite this loss of growth momentum, net employment and the volume of purchases increased, while business confidence was broadly aligned with its long-term average.
On the pricing side, input costs and selling costs increased slightly.
The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) fell to 56.5 in September from 57.5 in August, highlighting a solid improvement in the sector’s health which was nevertheless the weakest since January.
With manufacturing growth slowing throughout the fiscal second quarter, the average PMI figure fell to its lowest level in the three months through December 2023.
In the qualitative part of the survey, positive demand trends, successful advertising and favorable customer interest were the main determinants of sales growth.
Another factor that limited total sales growth was a more moderate increase in new export orders. Factories continued to produce goods at a brisk pace, above the long-term average.
Due to higher purchase prices, as well as increased labor costs and favorable demand conditions, Indian manufacturers increased their prices in September.
Hiring growth also slowed in September, reflecting a reduction in the number of part-time and temporary workers at some companies.
The combination of job creation and slower new business growth has allowed companies to control their workloads.
Around 23% of Indian manufacturers expect production growth in the coming year, while the remaining companies expect no change. As a result, the overall level of business confidence fell to its lowest level since April 2023.
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First publication: October 1, 2024 | 11:03 a.m. STI