India PMI


India: Growth in manufacturing improves while growth in services moderates

November 5, 2014

The manufacturing Purchasing Managers’ Index (PMI) elaborated by HSBC rose from 51.0 in September to 51.6 in October. The indicator hovered above the 50-threshold that indicates expansion in business conditions in the manufacturing sector for the 12th consecutive month.

HSBC pointed out that the moderate improvement observed in October reflected an increase in both intermediate goods’ production and new business, amid India's rising domestic demand. In addition, Indian firms saw an increase in foreign orders and, according to HSBC, “extending the current sequence of growth to 13 months.” That said, HSBC noted that businesses continued to lower purchases and refrained from aggressive inventory accumulation.

Meanwhile, the services PMI edged down in October, from 51.6 in September to 50.0. October’s result marked, according to HSBC a, “stagnation in business activity, following the five successive months of growth.” The main driver behind the decrease was a fall in activity in hotels and restaurants, while business activity in post and telecommunications improved over the previous month. HSBC concluded that, “the revival of reforms post recent state elections, if sustained, should lift growth on a broad basis.”

FocusEconomics Consensus Forecast panelists see fixed investment rising 4.3% in FY 2014/2015, which is unchanged from last month’s estimate. For FY 2015/2016, the panel expects fixed investment to increase 6.6%, which is also unchanged.

Author:, Senior Economist

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India PMI Chart

India PMI October 2014

Note: HSBC 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: HSBC and Markit.

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