Two surveys released on Monday painted two different pictures of the Indian economy.
While manufacturing growth slipped to a 22-month low of 50.7 in October, according to the Nikkei Indian Manufacturing PMI due to poor orders, growth in eight core sector industries rose to a 4-month high of 3.2% in September on the back of a sharp pick-up in fertiliser production and electricity generation. Infrastructure industries grew 2.6% in August.
The purchasing mangers index (PMI) stood at 50.7 in October, down from 51.2 in September. A figure above 50 indicates growth.
“October shows a further loss of growth momentum… with a slower rise in new business inflows resulting in a weaker expansion of output,” said Pollyanna De Lima, economist at Markit, which compiled the survey.
However, the report showed that manufacturers recruited additional workers in October, the first time since January.
“Undeterred by tough economic conditions, firms took extra staff in October. This, combined with a further drop in inventories of finished goods, suggests that production growth may rebound in coming months,” Lima added.
Last month also saw inflationary pressures returning to the country’s manufacturing economy. “This indicates that the RBI may pause its loosening cycle for the rest of the year following a 50-basis point cut in the key repo rate in September,” Lima said.
The output of eight core industries — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — stood at 2.3% during April-September, lower than 5.1% a year ago.