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IN: PMI Manufacturing Final
| Actual | Previous | |
| Level | 53.9 | 56.9 |
Highlights
The S&P Global India manufacturing PMI indicates activity in the sector lost momentum in March, with the headline index falling to 53.9 from a four-month high of 56.9 in February. This is just above the flash estimate of 53.8. Respondents reported that the Iran conflict had weakened demand and boosted cost pressures.
Although the survey shows output and new orders rose in March at the slowest pace since mid-2022, its measure of new export orders showed the strongest growth since last September. Respondents also reported the biggest increase in payrolls in seven months and remain positive about the outlook for output in twelve months. Input costs were reported to have risen at the fastest pace in more than three years but respondents reported that they had absorbed these costs to some extent and had raised selling prices at the slowest pace in two years.
Definition
The Manufacturing Purchasing Managers' Index (PMI) is a joint publication by Markit and the Nikkei media organisation and provides an estimate of manufacturing business activity for the preceding month. The report uses information obtained from a representative sector survey incorporating around 400 companies in eight broad categories. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting).
Description
Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic survey data such as the Markit PMIs, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.
The Markit PMI manufacturing data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. And its sub-indexes provide a picture of orders, output, employment and prices.
The HSBC India Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 500 manufacturing companies. The panel is stratified geographically and by Standard Industrial Classification (SIC) group, based on industry contribution to Indian GDP. Survey responses reflect the change, if any, in the current month compared to the previous month based on data collected mid-month. For each of the indicators the 'Report' shows the percentage reporting each response, the net difference between the number of higher/better responses and lower/worse responses, and the 'diffusion' index. This index is the sum of the positive responses plus a half of those responding 'the same'.