The seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) rose to 53.1 in October from 52.2 in September and it was underpinned by strong growth in new orders and an increase in employment growth. A reading above 50 denotes expansion from the previous month.
Despite these robust conditions, business optimism among manufacturers dipped to a 20-month low, on fears that market conditions may not remain as supportive as they are now. That is unsurprising, given uncertainty in the global economy and tight liquidity conditions as a result of the Infrastructure Leasing and Financial Services Ltd’s imbroglio. The accompanying chart on the New Orders, Employment and Future Output sub-indices of the manufacturing PMI highlight this contrast.