PMI

The HSBC Markit India Purchasing Managers Index PMI for July 2011 recorded another decline, moving down to 53.6. This is a 20 month low. The index above 50 is still expansion, and 53 means a lower pace than earlier but at least we're expanding.

But of the BRIC countries, we're doing the best on manufacturing. China, Russia and Brazil are, in comparison, what's the word, screwed. (All July Data)

The HSBC Markit June Manufacturing Purchasing Managers Index (PMI) shows some level of deceleration in growth. It's fallen to 55.3 from last month's 57.6, to a nine-month low.

Above 50 is expansion (growth) and below 50 is contraction. This is a monthly change, seasonally adjusted.

Last month's PMI was kinda sorta slowing but the slower piece was the Services PMI (June data releasing in two more days). The manufacturing PMI has finally gone a little bit lower..

I don't know how much we'll see actual economic data follow up. PMIs are only interesting in that they tell you how much more fuel we're putting into the system. There's a long way that momentum can take you anyhow. The commentary is:

These numbers confirm that tight capacity and monetary tightening is constraining growth. However, inflation pressures are still firmly in place, calling for further policy rate hikes to anchor inflation expectations."

Ooh. Fun, more rate hikes.

HSBC-Markit have released the India PMIs (Purchasing Manager Indexes) for May 2011. The overall composite PMI came in at 57.7, down from 60.7 in April. Above 50 is expansion, so we're still expanding but at a slower pace.

The Manufacturing Purchasing Manager's Index (PMI) by Markit has a story to tell. First, the Manufacturing PMI stays strong:

And the composite PMI is still intense, above 60:

(Remember, above 50 is expansion, below is contraction)

Rates of input cost inflation eased across both sectors monitored by the PMI surveys in April, with service providers recording the slowest rise in cost burdens for five months. As a result, the rate of input price inflation at the composite level eased to the weakest since last November.
Indian service providers attempted to offset part of the increase in input costs by raising their prices charged to customers. The pace of output price inflation was solid, and quickened to the fastest for a year. A broadly similar rate of charge inflation was recorded in the manufacturing sector.

(Emphasis mine)

What's interesting is that we're growing strongly and there's output price inflation. This should reverse as the RBI policies take effect.

From a trading perspective, this is a pretty good signal that we have some fundamental strength to the economy. I believe we're overheating, but the momentum of the past growth can carry us a long way. I would be very careful and selective with shorts.

The HSBC Markit Purchase Managers Index (PMI) is still going strong in March. The Composite Output PMI is at 60 (anything above 50 is an expansion), a tad lower than Feb's 61 but high all the same.

The March Manufacturing PMI was flat at 57.9. Flat above 50 is still expanding, and at nearly 58, we're doing well.

This data is useful only at extremes - too high or too low or confirming a trend. But it's a good indicator this time of where things aren't going too badly. We just hope the Purchase Managers aren't lying through their teeth!

HSBC India Composite PMI has gone to 61.0, up from January's 59.6. Services has strongly increased the PMI - the composite is a mix of the Manufacturing (last at 57.9) and services. Anything about 50 is expansion and below is contraction.

The funniest comment I read today was

I am not quite sure what a purchasing manager is – and I have no recollection of ever having met one – but everyone now seems to regard their views, as collected and processed into various indices as being frightfully significant.

(Hat tip: Tejus Sawjiani)

HSBC's India Purchase Managers' Index (PMI) is up to 57.9 from last month's 56.8. The PMI is an early indicator, which quantifies the orders received by firms. India gets two PMIs - Manufacturing and Services. Anything about 50 is "expansion" or, in understandable language: good.  Below 50 is bad, or "contraction".

We've been above 50 for a good while now, and there seems to be no real impact of this inflation control that RBI seems to be talking about, on orders received by manufacturers.

In their press release:

Key points
• New export orders rose at fastest pace in three months.
• Staffing levels down slightly for second month running.
• Input cost inflation fastest in series history.

(Emphasis mine)