India's Purchasing Managers Index (PMI) for the manufacturing sector, which led the upturn, has gone essentially nowhere over the last 6 months suggesting year-on-year industrial growth is likely to flatten out at a robust 8-10%. The headline index slipped to 54.5 from 55.0, but remained above August's level of 53.2. If the decline in the output (57.2 from 58) and orders (56.7 from 58.3) indices were disappointing, the rise in the employment index back above 50.0 (50.
and a decent improvement in the new export orders (53.4 from 50.9) to its highest level since August last year
offered welcome news.
It was surprising to see both the input and output prices indices fall in October (to 56.4 and 50.4 respectively). Although early days, the latter looks to have a reasonable relationship with wholesale price inflation and might go a little way to calming what are clearly extremely frayed nerves as the Reserve Bank of India.
