To be sure, manufacturing reported stronger gains than services in the data. India’s private sector activity reported a strong gain in momentum in September, as seen in the Flash Purchasing Managers’ Index (PMI) data released by S &P Global on Wednesday. The headline indicator, the HSBC Flash India Composite PMI Output Index increased from 54.3 in August to 56.5 in September.
All four indicators in the Flash PMI data show a strong improvement between August and September. Flash India Services PMI Business Activity Index increased from 54.1 in August to 55.8 in September. Flash India Manufacturing PMI Output and Flash India Manufacturing PMI also increased from 54.8 to 58.2 and 52.8 to 55.7 respectively.
PMI Manufacturing is a weighted average of five indicators, looking at overall factory conditions including new orders, output, employment, suppliers’ delivery time and stock of purchases While PMI Manufacturing output measures just factory production. Overall input cost inflation eased in September to its lowest mark since January thanks to softer cost pressures in services which helped offset the increase in prices amongst manufacturers. Firms that experienced an increase in overall cost burden attributed it to increased spending on electrical components, foodstuff, fuel, metals, pharmaceutical ingredients and technology resources. “Renewed tensions in the Middle East have once again led firms to build buffers to manage the uncertainties. Price pressures firmed at manufacturers, with output price inflation gathering pace, signalling a renewed push to protect margins,” she added.
A PMI value above 50 indicates expansion in economic activity over the last month. Input purchases picked up pace and the stocks of finished goods index is now at an 11-and-a-half-year high.
