India Manufacturing PMI Unchanged In September On Weak Demand

India’s manufacturing sector activity remained unchanged in September amid subdued demand conditions domestically and externally, a monthly survey said on Tuesday.

The IHS Markit India Manufacturing PMI was at 51.4 in September, unchanged from August—posting its joint-lowest reading since May 2018. The manufacturing PMI has stayed above the 50-point mark for the 26th straight month. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.

Business confidence, the survey said, sank to one of the lowest levels in more than two-and-a-half years. Some firms expect a pick-up in demand and investment in marketing to lift output in the year ahead, while others were concerned about competitive pressures and tough market conditions.

“In September alone, forward-looking indicators such as business confidence and quantities of purchases were down, suggesting that companies are bracing themselves for difficult times ahead,” Pollyanna de Lima, principal economist at IHS Markit, said. On the prices front, input cost inflation moderated to one of the lowest rates in over a decade. Subsequently, there was only a marginal rise in selling prices.

“In light of the weak results for economic growth and muted inflationary pressures signalled by the PMI data, we expect to see further monetary easing in the months ahead,” Lima said. The central bank, which has reduced the key policy rate four times in the current calendar year, is scheduled to announce its next bi-monthly monetary policy on Oct. 4.

India’s economic growth has slumped for the fifth straight quarter to an over six-year low of 5 percent in the three months ended June as consumer demand and private investment slowed amid deteriorating global environment.