Factory activity slows down to a minimum of 2 years in October
NEW DELHI: Factory activity slowed to its lowest level in two years in October as orders softened and production remained slow, a survey showed on Friday, which added to the series of grim data and It posed a challenge for policymakers to reverse the slowdown.
The manufacturing PMI IHS Markit India (Purchasing Managers Index) fell from 51.4 in September to a minimum of two years from 50.6 in October. The 50-point mark separates the expansion from the contraction.
The latest data showed that the eight main sectors, which include coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity, contracted 5.2% in September, their biggest decline in the 2011- series. 12. This was lower than the 0.1% revised upwards in August and below 4.3% in September 2018.
The survey showed that job creation softened to a minimum of six months, while companies were reluctant to maintain excess stocks and reduced the purchase of inputs in response. Business confidence fell to its lowest level in more than two and a half years. In another sign of moderate growth conditions, input costs decreased for the first time in more than four years.
The weakening of demand had a domino effect in the manufacturing industry, reducing rates of increase in production, employment and commercial sentiment. With the amount of purchases contracting for the third consecutive month, input costs fell for the first time in more than four years during October, said Pollyanna de Lima, principal economist at IHS Markit.
After five successive cuts in India's benchmark rate and an apparent delay in how quickly this is transmitted to consumers, the imminent reduction in commercial loan rates could revive private consumption and help increase custom growth We are approaching the end of the year. Lima said.
Economists wait RBI cut Interest rates again when you check monetary policy in December to boost growth. The measures presented by the government to counter the slowdown are also expected to increase growth in the coming months.