India PMI September 2016


India: Economic conditions moderate in September

October 5, 2016

Activity in India’s manufacturing sector lost steam in September. The manufacturing Purchasing Managers’ Index (PMI), elaborated by Nikkei and IHS Markit, fell from August’s one-year high of 52.6 to 52.1. Despite the fall, the PMI remains above the 50-threshold that separates expansion from contraction, where it has been since January.

Slower rates of growth were recorded across the board with new orders, output and buying levels all registering softer expansions. In addition, job creation continued to remain marginal overall. Meanwhile, price pressures increased slightly, but remained below the long-term trend, with firms reporting a particularly noticeable increase in steel prices.

Meanwhile, the Nikkei services PMI fell from August’s over-three-year high of 54.7 to 52.0 in September. The result was above the 50-threshold that indicates expansion in the sector. According to Nikkei, business sentiment fell among service providers on the back of challenging market conditions.

FocusEconomics Consensus Forecast panelists see fixed investment rising 6.1% in FY 2016, which is up 0.7 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 September 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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