India PMI October 2016


India: Economic conditions improve in October

November 3, 2016

Activity in India’s manufacturing sector gained steam in October. The manufacturing Purchasing Managers’ Index (PMI), elaborated by Nikkei and IHS Markit, rose from September’s 52.1 to 54.4, which marked the best result since December 2014. The PMI lies above the 50-threshold that separates expansion from contraction, where it has been since January.

Faster rates of growth were recorded in new orders and output, supporting the gain seen in October. In addition, outstanding business grew at the fastest pace in almost four years, however, firms refrained from taking on new staff. Meanwhile, price pressures increased although firms passed part of this onto clients and output price inflation hit a six-month high.

Meanwhile, the Nikkei services PMI rose from September’s 52.0 to 54.5 in October. The result was above the 50-threshold that indicates expansion in the sector. According to Nikkei, strong demand fueled an increase in output and positive business sentiment among service providers was seen.

FocusEconomics Consensus Forecast panelists see fixed investment rising 5.9% in FY 2016, which is down 0.2 percentage points from last month’s estimate. For FY 2017, the panel expects fixed investment to increase 7.3%.

Author: Angela Bouzanis, Lead Economist

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India PMI Chart

India PMI October 2016

Note: Nikkei India Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: Nikkei and IHS Markit.

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