New Delhi: India’s manufacturing activity in October grew at the slowest pace in eight months, due to rising cost pressures and a decline in demand for consumer goods, a private survey said.This happened despite an increase in new orders, it added.The Purchasing Managers’ Index (PMI) fell to 55.5 in October from 57.5 in September, the latest survey released by S&P Global on Wednesday (November 2) showed.According to Mint, though the October PMI Manufacturing data was above its long-run average of 53.9, it was the slowest rate of expansion recorded since February.PMI values are reported as a single number (usually on a scale of 0-100), where values above 50 typically indicate expansion, and values below 50 suggest contraction.The rate of job creation was the slowest since April, the survey noted, adding that only 4% of companies are hiring additional people and 95% are not hiring new staff.Business confidence slipped to a five-month low amid concerns surrounding inflation and demand, it added.“The survey’s new orders index slipped to a one-year low, as some firms raised concerns about the current demand picture for their products. Consumer goods were behind most of the slowdown, recording considerably softer increases in sales, production, exports, input inventories and buying levels,” said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.“We saw further indication of broadly-stable inflationary forces across the manufacturing industry. It appears that a moderate increase in input costs was simply passed on to clients. Nonetheless, qualitative evidence from the future output question revealed an interesting finding, as reports of rising inflation expectations were expected to dent demand and subsequently production growth over the coming 12 months,” added De Lima.Financial markets pay close attention to PMI data, and significant deviations from expectations can influence asset prices, including stocks, bonds, and currencies. For example, a higher-than-expected PMI can boost investor confidence, while a lower-than-expected PMI can lead to market volatility.
