Factory slump eases, orders still shrinking

NEW DELHI: Factory activity in India contracted for the second consecutive month in September as weak orders and high raw material costs prompted companies to reduce staff, although the slump eased compared with the previous month, latest data showed.

The overall Purchasing Managers’ Index (PMI) of HSBC, a metric that measures the entire gamut of industrial activity from output to sales, stood at 49.6 in September, up from 48.5 in the previous month, indicating a slower deterioration of business conditions. A PMI reading below 50 indicates output contraction.

The average PMI for Julyseptember, however, was the lowest since January-march 2009.

The HSBC India Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 500 companies based on industry contribution to India’s GDP.