India’s seasonally adjusted Manufacturing Purchasing Managers’ Index (PMI) fell to an eight-month low of 56.5 in September, according to data released by S&P Global on Tuesday.
The index was down from 57.5 in August, marking the slowest pace of expansion in 2024, impacted by intense competition.
The S&P Global report highlighted that while manufacturing activity continued to grow, the overall rate of expansion hit its lowest point since early 2024. The slowdown was particularly evident in the consumer and capital goods segments, while growth remained steady in the intermediate goods sector.
Price pressures also eased, with the rate of inflation slowing to a five-month low, mirroring a similar trend in input costs. However, despite new business growth, positive client demand, and increased production requirements, manufacturers purchased inputs at the slowest pace of the year so far.
“Output and new orders grew at a slower pace, and the deceleration in export demand growth was especially evident, as the new export orders PMI was the lowest since March 2023,” said Pranjul Bhandari, Chief India Economist at HSBC. “Input prices rose at a faster rate in September, while factory gate price inflation eased, intensifying pressure on manufacturers’ margins.”
Movement of Manufacturing PMI in FY25
| Month | PMI (Manufacturing) |
| April | 58.8 |
| May | 57.5 |
| June | 58.3 |
| July | 58.1 |
| August | 57.5 |
| September | 56.5 |
Job creation in the manufacturing sector remained positive, but slower new business growth helped companies manage workloads effectively. For the first time in 11 months, outstanding business volumes remained unchanged, ending a long sequence of backlog accumulation, according to the S&P Global report.
Bhandari also noted concerns over weaker profit growth potentially impacting hiring demand. “The pace of employment growth slowed for a third consecutive month,” she said.
Inventory trends were mixed. Stocks of finished goods continued to fall, extending a decline that has persisted for more than seven years. However, holdings of raw materials rose sharply, supported by improved lead times.
Business confidence also took a hit, with the overall level of optimism falling to its lowest since April 2024.
