Indian Manufacturing Steady

Oct. 1, 2012
Pick-up in export orders in September and the recently announced reform measures offer some hope for the future, HSBC says.

India's manufacturing growth held steady in September from the previous month, pointing to the sector stabilizing after expansion slowed recently, a private business index suggested Monday.

The HSBC India Manufacturing Purchasing Managers' Index (PMI), which gives a snapshot of manufacturing health from output to jobs, stood at 52.8 last month, unchanged from August, which was the slowest expansion in nine months.

"Economic activity in the manufacturing sector held steady (in September), supported by faster output growth and rising export orders" but those modest improvements were offset by a small drop in employment, said HSBC chief economist Leif Eskesen said.

The survey's findings -- based on data from over 500 manufacturers -- come as the Congress government embarks on a sudden wave of liberalization reforms to revive economic growth stuck at around three-year lows of 5.5%.

The pick-up in export orders in September and the recently announced reform measures offer some hope for the future, Eskesen said.

Another factor that could buoy the sector is the religious holiday season highlighted next month by Diwali, the Festival of Lights, which is considered an auspicious time to make big-ticket purchases.

Meanwhile, neighboring China's manufacturing activity contracted for a second straight month in September, according to government PMI data on Monday, falling short of expectations for expansion.

Copyright Agence France-Presse, 2012

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