October Manufacturing Sector Output- Experts Opine
Owing to robust demand and increase in new orders boosting production, India’s manufacturing sector output improved in October. We bring you experts’ view on the recent numbers and what it means for the economy
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Owing to robust demand and increase in new orders boosting production, India’s manufacturing sector output improved in October. The Nikkei/IHS India Manufacturing Purchasing Managers’ Index, the composite indicator of manufacturing performance strengthened from 52.2 in September to 53.1 in October, the quickest rate in 4 months. We bring you experts’ view on the recent numbers and what it means for the economy.
Aditi Nayar, Principal Economist, ICRA Ltd
The uptick in the October 2018 PMI manufacturing numbers is modestly encouraging. Given the distortion related to the later start to the festive season in 2018 relative to 2017, we need to wait and see whether this uptick sustains going into November 2018.
The overall outlook for the festive season appears mixed. While the GST rate cuts may support consumer sentiment, demand may be curtailed to an extent given the impact of rising fuel prices on disposable incomes. Whether the sharper depreciation of the rupee relative to some emerging market peers, positively impacts exports with a lag, remains to be seen.
Given the overhang related to the dip in the growth of core sector output, contraction in non-oil merchandise exports and impact of floods in some parts of the country, IIP growth is likely to display a muted base-effect led pickup at best in September 2018, from the modest level in August 2018.
Sudip Bandyopadhyay, Group Chairman, Inditrade Capital Ltd
With dark clouds hovering over the Indian economy, in the form of the falling rupee, rising oil prices and volatile markets, the news of yet another strong reading of the Nikkei India Manufacturing PMI in October (which has been above 50-point mark for the last 15 months) is very heartening. It affirms that the fundamentals of the economy are still robust. But despite the stronger orders, input purchasing and employment at present, the caveat comes in the form of the survey recording the weakest degree of optimism in 20 months. This could translate into a less sanguine PMI in the future.
Rachit Chawla, Founder and CEO, Finway
A sharp rise in India’s ranking in Ease of Doing Business and a positive growth in the Manufacturing sector, these are the signs of a healthy economy which not only motivate industry players but also encourage investors and venture capitalists to accelerate the momentum. Also, as production has increased by 4.3 per cent even before the festival season, the coming few months will be more lucrative as the demand of consumer products will go upward due to the ongoing festival season followed by wedding season. On the whole, the current trend suggests that the Equity Market is going to experience a profitable winter season.