Manufacturing

Bucking the trend.

According to the Nikkei India manufacturing purchasing manager's index (PMI), which measures the performance of the manufacturing sector. The manufacturing PMI is based on five individual indexes with the following weights: New orders(30%), output(25%), employment (20%), supplier's delivery times(15%) and stock of items purchased (10%), with the delivery times index inverted so that it moves in a comparable direction. However, the rates of expansion eased slightly in both cases. Reflecting greater inflows of new work, Indian manufacturers raised their staffing levels, and at the fastest pace since October 2012. The PMI in India came in at 51.2 in September 2017, the same as in a month earlier but below market estimates of 51.9. While output and new order growth remained weak in the context of historical survey data, employment grew the most since October 2012 and confidence strengthened. The introduction of GST, as well as higher prices of steel and petroleum products, reportedly caused cost pressures to intensify during September. the rate of inflation was modest, and remained below the long-run series average. Firms raised their selling prices to protect margins amid higher inflationary pressures. As much as the manufacturing sector would like to see growth, sudden change in policies (meant for the general good of the people) can create a setback for the manufacturing sector. For long, this is, perhaps, the only sector that has a strong visible measurable presence in the economy and the government policy might take time for more positive results. Now we need only wait for the union budget to see if the government will continue with its reforms trajectory and bring back the Indian GDP growth rate to Q1 2016 level of 9.2%