according to the HSBC, India, Manufacturing PMI.
Both output and new orders contracted at slower rates. Still, faced with fewer projects, companies reduced their workforce numbers for the first time since February 2012.
Up from 48.5 in August to 49.6 in September, the seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) indicated a marginal and slower deterioration of business conditions in India. However, the PMI quarterly average for Q3 was the lowest since Q1 2009.
"September data pointed to a further contraction of manufacturing production in India, with panellists commenting on lower levels of incoming new work and economic instability. The overall rate of contraction was, however, marginal and eased since August.
Although new orders fell at a slower and marginal pace, the contraction of export business accelerated to the quickest in over two years. Anecdotal evidence suggested that a depreciation of the rupee versus the US dollar had resulted in higher prices paid for inputs and limited firms' ability to price competitively," an HSBC PMI release states.
Indian manufacturers reduced their buying activity for the second month running in September. However, quantity of purchases fell only slightly and at a slower rate than that seen one month previously.
Commenting on the India Manufacturing PMI survey, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said: "Manufacturing activity continued to shrink in September, albeit at a slower pace. Order flows remain weak, especially export orders, and employment fell. Moreover, businesses cut back quantity and stocks of purchases. While output prices rose at a slower pace, input prices rose markedly, as the effects of the weaker exchange rate continue to pass through. Despite the weak growth readings, the build-up in underlying inflation pressures suggests that the RBI has to keep its inflation guards up."