HSBC India PMI data

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

HSBC PMI DATA INDIACTE 50% OF CHANCES IIp data likely lower( which is
due next week)
Summary
The seasonally adjusted HSBC Purchasing Managers’ Index™ (PMI™) – a
headline index designed to measure the overall health of the
manufacturing sector – registered 54.7 in March, down from February’s
56.6. The latest reading pointed to a solid improvement in business
conditions, although growth was below the long-run trend.
Indian manufacturers reported a marked rise in new business received
during March. However, the rate of expansion was the weakest in three
months. Anecdotal evidence suggested that power cuts and raw material
shortages had limited manufacturers’ ability to take on new business
and customers’ propensity to place orders – despite a general
improvement in demand. In contrast new export order growth gained pace
in March.
With the expansion in output restricted, backlogs of work accumulated
at a marked pace that was the fastest in the series history. Stocks of
finished goods rose only modestly, with the vast majority of
respondents noting no change in post-production inventories since
February.
March data signalled a marginal rise of employment in the Indian
manufacturing sector. Job creation has now been registered in three of
the last four months. Where an increase in staffing levels was
indicated, this was attributed to higher output requirements.
The rate at which purchasing activity rose was marked, but slowed
during March. This was in line with weaker expansions in production
and new orders. Nonetheless, suppliers’ delivery times lengthened
again, and to a greater extent than in February. Panellists commented
that power cuts had impeded deliveries, and this was compounded by
some shortages of raw materials. Stocks of purchases rose again in
order to accommodate growth of output.
Input prices faced by Indian manufacturers increased substantially
during March. Higher raw material prices were cited as the main driver
of inflation. The latest rise in costs was the second-slowest in 17
months, but remained elevated in the context of historical data.
Subsequently, manufacturers aimed to pass on higher input prices to
customers by raising their prices charged. However, the rate of charge
inflation slowed to a 16-month low.
Comment
Commenting on the India Manufacturing PMI™ survey, Leif Eskesen, Chief
Economist for India & ASEAN at HSBC said:
“Activity in the manufacturing sector expanded at a slower pace in
March led by a moderation in output and order growth, although export
orders accelerated. Capacity remains tight, with backlogs of work
increasing, and supplier delivery times lengthening. While inflation
of output prices eased, a further rise in input price inflation
suggests it could pick up again as cost pressures are passed on to
customers. These numbers suggest that upside risk to inflation remain
and that the RBI's easing cycle, in terms of timing and magnitude,
depends on the extent to which these risks materialize.”
Key points
􀂄 Output and new order growth weaken, as power cuts lead to capacity
constraints
􀂄 Backlogs rise at fastest pace in survey history
􀂄 Employment increases marginally