India: Private sector PMI climbs towards stabilization in September
October 1, 2020
The composite Purchasing Managers’ Index (PMI) produced by IHS Markit rose to 54.6 in September from 46.0 in August. Consequently, the PMI jumped above the 50-threshold indicating an increase in business activity from the previous month.
The services PMI rose to 49.8 in September from 41.8 in August as new orders fell at the softest pace since March, while output was virtually stable and employment levels fell at a faster pace in September compared to August. On the price front, input costs rose, but output price inflation was relatively similar to August in September.
On the manufacturing side, the PMI climbed to 56.8 in September—the highest level since January 2012—from 52.0 in August with output and new orders expanding robustly, while employment levels continued to decline in September.
Commenting on the latest PMI data, Pollyanna De Lima, economics associate director at IHS Markit, said:
"Taking into account the performance of the manufacturing industry, a better picture of the Indian economy is painted. Private sector output expanded for the first time in six months during September, and at an above-trend rate, while the increase in sales was the first since February. The news will be welcomed by policymakers, particularly following the pandemic-related 23.9% contraction in GDP in the opening quarter of fiscal year 2020/21."
Author: Steven Burke, Economist