Goods producers in India noted a mild slowdown in growth during September, the S&P Global PMI showed. Nevertheless, a sharp rise in new orders underpinned sustained expansions in output, input purchasing and employment. Supply-chain conditions were broadly stable, which helped drag down the rate of input price inflation to its weakest in over three years. That said, greater labor costs, upbeat business confidence and buoyant demand facilitated a sharper increase in factory gate charges.
New orders, the largest sub-component of the PMI, rose at a softer pace in September. That said, the latest increase was sharp and historically strong. Where an expansion in sales was reported, survey participants cited favorable demand trends, positive market dynamics and fruitful advertising.
Growth of new export orders softened from August's nine month high, but remained sharp. September data showed a let-up in the recent surge in costs faced by Indian goods producers. Nevertheless, reportedly driven by higher labor costs and demand strength, average prices charged by Indian manufacturers rose at a solid and faster rate that outpaced its long-run average.
Ongoing increases in new orders continued to underpin production growth at the end of the second fiscal quarter. The positive outlook for production and demand strength fed through to another round of job creation in the manufacturing industry. Manufacturers' purchasing of inputs continued to grow at a robust rate that was aligned with those seen for new orders and production. Finally, the data showed a general lack of pressure on the capacity of Indian manufacturers and their suppliers.
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