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Wednesday, November 12, 2008

India's Manufacturing Industry Continues To Expand in September

Just following up briefly on my last post, as anticipated by the PMI report India's industrial production growth bounced back again in September. Output at factories, utilities and mines rose 4.8 percent from a year earlier after a revised 1.4 percent gain in August, according to data from the Central Statistical Organization today (Wednesday).

India's factory output rose 4.9 percent in the six months to September from a year earlier, less than half the 9.5 percent pace recorded in 2007, according to today's report.

And the expansion in Indian manufacturing looks set to continue into October according to the latest ABN AMRO Bank purchasing managers' index (PMI) report. The index, which isbased on a survey of 500 companies, slumped to a seasonally adjusted 52.2 in October, its lowest since the survey began in April 2005 and sharply below September's 57.3. A reading above 50 signals expansion while a figure below 50 suggests contraction, and the manufacturing PMIs are interesting, since they do offer us a sort of "real time" snapshot of what is actually happening.