The Manufacturing Sector PMI decreased to 54.1 index points in September 2018 from 58.2 index points recorded in August 2018. The slowdown observed in manufacturing activities in September was mainly driven by the slowdown in new orders and production, especially in manufacturing of food and beverages activities.
Respondents highlighted that they had to increase their prices during the period due to increase in input cost of imported raw materials with rupee depreciation. This led to a decline in demand for their products, which in turn resulted in a decrease in new orders and production.
Overall employment and stock of purchases also slowed down.
Meanwhile, lengthening of suppliers’ delivery time usually indicates that economy is booming with expanding activities in the short run. However, in this instance, lengthening of suppliers’ delivery time was due to manufacturers’ intentional increase of the lead time with the expectation of rupee stabilization. Thus, it does not indicate an expansion in economic activities.
Overall, all the sub-indices of PMI recorded values above the neutral 50.0 threshold signalling an overall expansion in September yet at a slower pace compared to August.
Meanwhile the Services Sector PMI declined to 53.0 index points in September 2018 from 57.0 index points recorded in August 2018.
This indicates that the Services sector expanded at a slower pace in September 2018, recording the lowest index value since survey began in May 2015.
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