India’s manufacturing activity shrank in August: HSBC survey

India's manufacturing sector activity shrank for the first time in over four-and-a-half years in August with both output and business orders witnessing a significant decline, an HSBC survey reveals.

In an overall contraction, the HSBC/Markit Purchasing Managers Index for the manufacturing industry stood at 48.5 in August, down from 50.1 in July.

The latest index reading comes as the lowest in over four-and-half years, and the first below-50 reading since March 2009.

According to HSBC chief economist for India and ASEAN Leif Eskesen, manufacturing activity contracted in August for the first time since March 2009. He added, this was led by a decline in new orders, especially export orders.

The index had, since May,  barely managed to remain above the crucial 50-mark that dividing growth from contraction.

However, business conditions in the manufacturing sector worsened during August for the first time in over four years, with both output and new orders retreating at faster rates.

The reading follows closely after the bleak official figure on Friday that showed that the country's economic growth in the April-June quarter was down to 4.4 per cent, the lowest in past several years (See: India's GDP growth slips to a four-year low of 4.4% in Q1-FY'14).http://www.domain-b.com/economy/general/20130831_growth_slips.html
 
HSBC said, amid reports of fragile economic conditions and subdued client demand, new orders placed at Indian manufacturers declined in August. Also, new business from abroad too declined, ending an 11-month sequence of growth.