2019.11.0106:42:00UTC+00India Manufacturing Growth At 2-Year Low

India's manufacturing activity grew at the slowest pace in two years in October driven by weak orders and production, survey data from IHS Markit showed on Friday.

The headline IHS Markit manufacturing Purchasing Managers' Index, or PMI, decreased to 50.6 in October from 51.4 in September. However, any reading above 50 indicates expansion in the sector.

Sales increased for the twenty-fourth month in a row in October but the upturn was the slowest over this period. Similarly, output expanded at the slowest rate in two years.

New export orders at a quicker pace than seen in September signaling that the domestic market was the source of weakness.

The overall cost burden declined with lower demand for raw materials and semi-finished items. At the same time, selling prices rose at the fastest pace in seven months.

Both pre- and post-production inventories decreased in October.

Payroll numbers continued to increase for 19 months, though the upturn in employment was the second weakest over this period, ahead of that seen in April. Further, the rise in backlogs was the fastest since March.

Finally, manufacturers were least upbeat towards the 12-month outlook for production since February 2017.

"Weakening demand had a domino effect in the manufacturing industry, knocking down rates of increase in production, employment and business sentiment," Pollyanna de Lima, principal economist at IHS Markit, said.