Factory Activity Growth In India At An Eight And A Half Year High In September: Report

Factory activity in India reached an eight and a half-year high in September, Economic Times reports. The IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) was 52 in August. It increased to 56 in the ninth month of the year.

The lifting of lockdown restrictions coupled with high demand resulted in this figure.

Reflecting on these numbers, ET quoted Economics Associate Director at IHS Markit Pollyanna De as saying, “The Indian manufacturing industry continued to move in the right direction, with PMI data for September highlighting many positives. Due to loosened Covid-19 restrictions, factories went full steam ahead for production, supported by a surge in new work.”

Moreover, the increase in PMI for September was the third-quickest in the history of the survey. If the reading of the study is below 50, it warns of a contraction in factory activity. If it crosses that mark, then a signal of expansion is attained. The rate of expansion this time around has increased the fastest since the early-2012.

The PMI average in the June quarter was 35.1 in comparison to 51.6 that has been recorded from the July-September period.

However, employment figures decreased for the sixth consecutive month. De Lima explained, “One area that lagged behind, however, was employment. Some companies reported difficulties in hiring workers, while others suggested that staff numbers had been kept to a minimum amid efforts to observe social distancing guidelines.”

The report even mentions that one-third of manufacturers are anticipating an output growth in the coming year. On the other hand, 8% of them expect a contraction. Nevertheless, this is the strongest degree of overall optimism in more than four years. “While uncertainty about the Covid-19 pandemic remains, producers can at least for now enjoy the recovery,” De Lima added.