Manufacturing sector in India registers slight growth in October
01 Nov 2012
India's manufacturing sector registered some growth in October, on new orders, though production was weighed down by persistent power shortages according to an HSBC survey.
The HSBC India Manufacturing Purchasing Managers' Index (PMI), a measure of factory production stood at 52.9 in October up slightly from September's 52.8.
The index has been above the 50-mark which separates contraction from expansion, for over three years now.
The October reading of HSBC PMI suggests further improvement in the health of the manufacturing sector, which witnessed the weakest growth rate in nine months in August.
The recovery in manufacturing growth is expected to be slow, going forward, according to HSBC. It added that backlogs of work in the Indian manufacturing sector were accumulated at a sharp rate during October due largely to persistent power shortages.
HSBC chief economist for India and ASEAN Leif Eskesen said, economic activity in the manufacturing sector picked up slightly thanks to firm new orders adding however that insufficient power dampened output growth and led to an increase in outstanding work.
Regarding inflation, HSBC said it eased significantly with both output and input prices rising at a slower pace in October but would likely stay "elevated for a while".
