Latest data from the ABN AMRO India survey of the Indian manufacturing economy signaled a further marked expansion of the sector in September. The seasonally adjusted ABN AMRO India Purchasing Managers’ Index (PMI) rose from 57.9 in August to 59.1 in September.
Commenting on the latest survey findings, Gaurav Kapur, senior economist, ABN AMRO Bank N.V, said: “An 11-month-high reading of the PMI for September, suggests that business conditions in the manufacturing sector continue to improve. Activity levels expanded further over the previous month, as many more respondents saw higher levels of new business both from local, as well as, foreign sources. Not only did the output levels rise in response to greater demand over the previous month, even the backlog of work increased. The pricing power also improved. The output price index rose over its August level while the input price index declined. Output prices were raised in line with higher average input costs. Overall, the PMI details suggest that the manufacturing sector is witnessing robust growth.”
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Incoming new business volumes rose sharply in September, bolstered by favorable market conditions and the successful acquisition of new clients.
Despite higher levels of production, unfinished business in the Indian manufacturing sector rose for a sixth consecutive month in September, albeit only moderately.
Indian manufacturers continued to add to their workforces, which they linked to rising levels of demand and planned company expansions.
Higher quantities of purchases contributed to a further robust rise in pre-production inventory levels. Stocks of finished goods increased for the second successive month, although the rate of growth was only moderate.
Firms reported a further sharp rise in their average costs in September, although input price inflation eased from the previous month. Output price inflation accelerated in September, with panelists reporting a solid increase in factory gate prices.