Manufacturing PMI nudged up to 52.9 in October

BANGALORE Thu Nov 1, 2012 10:33am IST

A worker stands next to a room heater manufacturing unit inside a factory in Srinagar October 1, 2012. REUTERS/Danish Ismail

A worker stands next to a room heater manufacturing unit inside a factory in Srinagar October 1, 2012.

Credit: Reuters/Danish Ismail

Related Topics

BANGALORE (Reuters) - India'a manufacturing growth inched up in October from September's 10-month low, supported by a pick up in new orders and an easing of price pressures, a survey released on Thursday showed.

The HSBC manufacturing purchasing managers' index (PMI), which gauges the business activity of India's factories but not its utilities, nudged up to 52.9 in October from 52.8 in September.

The index has remained above 50, which divides growth and contraction, for over three and a half years.

"Economic activity in the manufacturing sector picked up slightly thanks to firm new orders," said Leif Eskesen, an economist at HSBC, which sponsors the survey. "Looking ahead, the recovery in manufacturing growth is likely to be slow."

The new orders sub-index, an indicator of future output, edged up to 54.9 last month from 54.4 in September while export orders grew for the second straight month albeit at a slightly slower pace.

Data released last month showed manufacturing rose 2.9 percent in August from a year earlier after contracting 0.4 percent in the previous month. Overall output at factories, mines and utilities rose an annual 2.7 percent.

PRICE PRESSURES EASE

Input and output price indexes fell to their lowest levels in more than two years. But Eskesen said this did not necessarily indicate India's inflation, which rose to a 10-month high of 7.8 percent in September, would cool anytime soon.

Instead, Eskesen said inflation would remain elevated for a while yet, reflecting a Reuters poll which suggested prices will peak in the last three months of 2012 before slowing.

The central bank has maintained that high price pressures keep it from cutting interest rates in the face of slowing economic growth.

The Reserve Bank of India has held interest rates steady since April even as many other central banks cut rates.

It left rates on hold again on Tuesday but cut the cash reserve ratio for banks, which is expected to inject 175 billion rupees into the banking system.

Unusually, Governor Duvvuri Subbarao gave fairly explicit policy guidance, saying the central bank might ease policy in January to March, the final quarter of the fiscal year, when it expects inflation to ease.

The central bank is under pressure from the government and industry to cut rates to try to help revive economic growth, which has slipped to its weakest pace in almost three years. (Editing by Andy Bruce and Neil Fullick)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Market Eye

Sensex, Nifty rise to second consecutive record high

Sensex, Nifty rise to second consecutive record high

The BSE Sensex and Nifty on Friday rose to their second consecutive record highs. The 30-share Sensex surged as much as 1.52 percent to an all-time high of 27,762.13. The broader Nifty gained as much as 1.49 percent to a record of 8,291.65.  Full Article 

REUTERS SHOWCASE

Ban on E-Cigs?

Ban on E-Cigs?

Govt considers ban on e-cigarettes, sale of single smokes.  Full Article 

Commodities

Commodities

Silver futures in India hit four-year low on global cues.  Full Article 

BOJ Policy

BOJ Policy

BOJ shocks markets with surprise easing as inflation slows.  Full Article 

Cost Cutting

Cost Cutting

PM Narendra Modi boots officials out of the first class cabin  Full Article 

Leisure Riding

Leisure Riding

Harley-Davidson woos affluent young Indians with bike culture  Full Article 

Shadow Banking

Shadow Banking

China's shadow banking sector growing rapidly, third largest in world - FSB.  Full Article 

Moody's on India

Moody's on India

Moody's welcomes India's policy steps, but wants to see more.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage