India’s July PMI at 54.4, Marginally Lower

Comments Off Written on August 7th, 2012 by
Categories: PMI

India's July PMI (Purchasing Manager's Index) dropped to 54.4, only marginally off the last month's figure of 55.7. Anything above 50 is expansion so the growth story hasn't really ebbed. The number is a composite of the services and manufacturing PMIs, the latter of which saw a fall to 52.9 from the 55 levels.


India has been growing for 39 consecutive months. Input inflation it seems has slowed to a 21 month low and it might just seem that money tightness has helped.

At this point, any good news will be taken positively by the market, after such a long period of bad-to-worse news flow. In any event I expect that tiny but non-crucial policy events will occur to encourage investors, until the next crisis. The fat lady hasn't quite sung yet.

June PMI Strong at 55+

Comments Off Written on July 6th, 2012 by
Categories: PMI

The HSBC Markit Purchasing Managers Index (PMI) has shown continued expansion in June, with the manufacturing PMI at 55, and the composite index (consisting of both manufacturing and services) going up to 55.7 from 55.3. For the PMIs, a print below 50 means contraction and above 50 is expansion.


But the comments are interesting:

“While service sector activity grew at a slightly slower pace, new orders grew faster and this should hold up activity in coming months. Moreover, employment picked up, which helped reduce the backlogs of work, and businesses remained relatively optimistic about the outlook for the coming 12 months, although sentiments eased a bit from the previous month. However, the inflation readings for input and output prices were broadly unchanged from May and remain high by historical standards. Together with manufacturing PMI, these numbers suggest that it is hard to build a strong case for policy rate cuts in the near term."

This month, there is an RBI meet that is largely expected to drop rates. Will they?

April 2012 Composite PMI Holds Up at 53.8

Comments Off Written on May 4th, 2012 by
Categories: PMI

The April 2012 HSBC-Markit Purchasing Managers Index (PMI) Composite index for India comes in at 53.8, unchanged from last month. (The Manufacturing PMI was 54.9 while Services PMI was 52.8)


The implication is that growth hasn't stalled and that inflation risks remain high, so RBI won't continue with the rate cuts. But just one rate cut after 13 hikes? Well, time will tell.

April Manufacturing PMI at 54.9

Comments Off Written on May 2nd, 2012 by
Categories: Macro, PMI

HSBC-Markit's Purchasing Manager's Index (PMI) for April 2012 came in at 54.9, marginally higher than the 54.7 in March.


PMI is a better indicator than IIP, but this data isn't hugely positive or negative. We'll wait for the services and composite PMI data to come in tomorrow.

February PMI at 57.6, Below Jan But High Enough

Comments Off Written on March 5th, 2012 by
Categories: PMI

In what should be good news, the HSBC Markit Purchasing Manager’s Index (PMI) is at 57.6 in February, down from Jan’s 59.6 but still very strong. Above 50 in expansion and below it is contraction, so 57 is a strong number. And

Input prices faced by companies in India rose at the weakest rate in four months in February. Nonetheless, the rate of cost inflation remained marked and above the long-run trend.

Service companies in India were optimistic in February that activity would rise over the next year. Higher new work intakes, supported by marketing initiatives and the good quality of services provided, alongside ongoing improvements in market conditions are expected to boost activity. Confidence was at an eight-month high in the latest survey period.

The Manufacturing part of the PMI (the other is Services) was at 56.6.


The deal-breakers to growth are seen as oil prices and the RBI not easing due to high inflation.

India Manufacturing PMI Rockets Up To 57.5

Comments Off Written on February 1st, 2012 by
Categories: PMI

The HSBC Markit Purchasing Managers Index (PMI) has moved substantially up to 57.5. Numbers above 50 indicate expansion, and below 50 are contraction.


While demand has recovered, inflation remains high, according to the press release. This can only mean that we are going to need further measures to curb inflation. The impact of a strong dollar hasn’t quite hit us as yet, it seems. (Either that, or it’s the exporters that are buying!)

Dec 2011 Manufacturing PMI Spikes Up to 54.2

Comments Off Written on January 3rd, 2012 by
Categories: PMI

Markit has released the Purchasing Managers Index (PMI) for Dec 2011, which is up to a high value of 54.2 (remember, lower than 50 is contraction, above 50 is expansion).


This comes after three tough months of touching close to 50; interestingly, they say:

All in all, these numbers suggest it's premature for the RBI to replace inflation with growth
as the main concern.

Inflation still remains stubbornly high - and I'm sure the dollar situation with the rupee will show up in inflation numbers for Dec or Jan.

Note that this is only manufacturing. The true picture will come only after the services PMI is released, which will be on the 4th.

November PMI at a 3 Month High

Comments Off Written on December 5th, 2011 by
Categories: Macro, PMI

India’s Purchasing Manager’s Index (PMI) accelerated to a three month high in November 2011 to 52.3, from October’s 50.3. (This is a composite index, a mix of Services and Manufacturing PMIs)


PMI for Manufacturing for Nov 2011 on the other hand, has fallen to 51.0, down from October’s 52.0.


Input costs and output prices are still going up, which means inflation stays elevated. Employment continues to fall, it seems.

China, on the other hand has fallen below 50 (Composite PMI).


India’s Manufacturing PMI for Oct Goes Up To 52

1 Comment » Written on November 2nd, 2011 by
Categories: PMI

The HSBC India Manufacturing Purchasing Managers Index is out for October, improving to 52.


This could just be the Diwali impact, in terms of a resurgence of expansion. Let’s wait for the services and Composite PMI data, out tomorrow.

September PMI Falls to 50 (Services and Manufacturing)

Comments Off Written on October 5th, 2011 by
Categories: PMI

India’s HSBC Markit Purchasing Managers Index have been released for September.

The Manufacturing PMI fell down to 50.4 from the August’s 52.6, which is the lowest in 2.5 years.


Above 50 is expansion so we are still growing, but at a considerably lower pace. Noteworthy is that export orders were contracting due to “weaker global economic conditions”, and that inflation pressures remain firmly in place.

The Composite PMI (includes Manufacturing and Services) declined to 50.2 from August’s 54.5, a very big drop and the lowest since November 2008, which was a pretty horrible month if you remember. Services by itself went to 49.8 down from 53.8, suggesting some contraction.


We’re slowing. It now needs to show in decreased inflation figures over the next six months – the RBI will be careful to not reverse their moves unless they see a sustained drop.

Indian Manufacturing PMI Falls to 52.6

Comments Off Written on September 2nd, 2011 by
Categories: PMI

The Indian Purchasing Manager’s Index (PMI) for Manufacturing fell to 52.6 for August, from 53.6 in July.


Read the rest of this entry »

India PMI Dips to 53.6, But is Best of BRIC

Comments Off Written on August 1st, 2011 by
Categories: 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.

India PMI July 2011

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)

China, Russia , Brazil PMIs

June 2011 Manufacturing PMI Down to 55.3

Comments Off Written on July 1st, 2011 by
Categories: PMI

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.

 June Manufacturing PMI

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.

Indian May PMIs Show Slowing Growth

Comments Off Written on June 3rd, 2011 by
Categories: PMI

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.

India Composite PMI

Read the rest of this entry »

India April PMI Very Strong

Comments Off Written on May 10th, 2011 by
Categories: PMI

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

Manufacturing PMI

And the composite PMI is still intense, above 60:

India April Composite PMI

(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.

March PMIs Still Show Strong Expansion

Comments Off Written on April 12th, 2011 by
Categories: PMI

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.

India March 2011 PMI Composite

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

India March Manufacting PMI

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!

India Composite PMI goes to 61 from 59.6 in Feb

Comments Off Written on March 3rd, 2011 by
Categories: PMI

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.

India Services PMI 

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 India Manufacturing PMI: Up at 57.9

Comments Off Written on March 2nd, 2011 by
Categories: PMI

HSBC's India Purchase Managers' Index (PMI) is up to 57.9 from last month's 56.8. The PMI is an imageearly 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)

PMI grows in Jan as well

Comments Off Written on February 3rd, 2011 by
Categories: PMI

Markit has released data on both the Manufacturing and Composite Purchase Managers' Index for Jan. They came in at 56.8 and  59.6 respectively.

HSBC India Manufacturing PMI HSBC India Composite Output PMI

As we saw for the manufacturing sector, however, the supply side is struggling to keep pace with the strong momentum in domestic demand, which is manifesting itself in accelerating input prices and is spilling over to prices charged. Moreover, rising food and fuel prices are adding to inflation. The current strong pace of activity is clearly not compatible with comfortable and stable levels of inflation, underscoring the urgency of continued monetary policy tightening and the need to prepare a budget for the next fiscal year, which is consistent with an appropriately contractionary fiscal policy stance.

We're doing well - anything above 50 is good - and it seems to be getting stronger. PMI hasn't been much of a leading indicator but it has shown that sustained levels above 50 mean a strong economy. But the concern now is that this is demand driven inflation (rather than a lack of supply) and as input prices increase, manufactured goods, typically benign, will start to participate in inflation. Leading to more chaos.

But have no illusions - this is a really strong, bullish report.

India December PMI at 58.9, Dips From Nov

Comments Off Written on January 6th, 2011 by
Categories: PMI

From Markit, the HSBC India Services PMI (Purchase Managers’ Index) showed a dip to 58.9 from November’s 61.3.


One piece that needs focus:

December data signalled a marked rise in input costs faced by companies in India. The latest rise was the fastest in seven months, and was driven by increased input prices in both the manufacturing and service sectors. Output prices rose markedly during December, and at a pace above the long-run series average. This suggested that Indian companies found it easier to pass on higher costs during the month.

(Read My Earlier Posts On PMI)

India October PMI Up to 57.2

Comments Off Written on November 1st, 2010 by
Categories: PMI

The HSBC Markit October India Manufacturing Purchasing Manager’s Index (PMI) was released today and it bumped back up to 57.2 from the 55 levels last month.

(Above 50 indicates expansion, below 50 is contraction)

HSBC Markit India October PMI at 57.2


October data signalled a marked rise in input prices faced by manufacturers in India. Moreover, the rate of input cost inflation was stronger than that recorded in September. The increase in input costs drove a further rise in output prices. However, this was relatively small compared to that seen for input prices, suggesting that manufacturers were still finding it difficult to pass on increased costs to customers.

This probably means RBI will continue the rate increase process tomorrow.

Earlier posts on PMI:

India PMI drops to 56.3

Comments Off Written on October 5th, 2010 by
Categories: PMI

The HSBC Purchasing Managers Index (PMI) shows a sharp fall from the 60.3 number in Aug to 56.3 in September. (Source: Markit)

Markit PMI for India

A figure above 50 indicates expansion, and below 50 is contraction. The data doesn’t say we are slowing down, but that the rate of acceleration is reducing. Imagine you’re in a car driving at 60 k.m. per hour and you reduce speed to 40 k.m. per hour. You’re still going forward! But of course, if you’re slowing down because you have no gas left is a sign of trouble. Gotta read the signs right.

From the press-release, Frederic Neumann, Co-Head of Asian Economics Research at HSBS says:

“India's service industry is stepping off the throttle. Along with the manufacturing sector, growth is slowing, although the expansion continues. Price pressures, however, have not eased meaningfully, which represents a challenge for the central bank. The pace of hiring has slowed as well, even if it remains in positive territory. All this suggests a mild easing of demand growth since the red-hot pace earlier this year, but is hardly enough to relax the guard on inflation. Monetary officials may still need to tighten further to avert price pressure from becoming entrenched.”

Earlier posts on PMI:

Munger’s Chutzpah, Overheating India, PMI

2 comments Written on September 21st, 2010 by
Categories: PMI, Readings

Mish is pissed at Charlie Munger’s Gall, Chutzpa and Unmitigated Effrontery when Munger thanked God Bailouts were given rather than handouts. I agree with Mish – this is rich, coming from a guy who benefited hugely from the bailouts. To tell the working classes to “suck it up and cope” is very very insensitive, and is the exact kind of argument that will provoke the average american to poke him with pitchforks if the tables turn violently. At this point, there is probably enough outrage to say that if there is another crisis, there will be zero public tolerance for a wall street bailout. Which, I really think, is a good enough reason for the people in power to do anything they can to prevent another crisis – precisely because next time, there will be no financial system to speak of. But I digress.

Niranjan Rajadhyaksha asks if India is overheating. The answer seems to be no – considering moderated scale of growth, M3 growth (only 15.1%), bank credit growth of just 20%, inflation comign down, lack of a credit bubble and the fact that our market-cap to GDP is only 104%. All the data looks good compared to Jan 2008, but I’m not sure that was the tipping point for “overheating” – that point was likely to have been a long time earlier (and remember, this is the time when the world economy was doing fairly well, in comparison with now). Are we reaching bubble territory – definitely, with market caps going higher than GDP (and wait, a good number of more IPOs are on the way) and P/E rations going through the roof. Niranjan does complain about current account deficits, but honestly that’s bound to happen because we are a net importer, and we won’t let our currency appreciate in any serious way. The fiscal situation seems worse than it needs to be, with the government doing the overspending rounds again. That is sad, and looking at the state of the Common Wealth Games, I doubt the government should be trusted with anything more complex than, say, sharpening a pencil.

Overheating or not, Cops are throwing migrant workers out of Gurgaon.

India’s September PMI shows a fall to 59 from 61 – but everything above 50 is expansionary so there.

India PMI dips slightly to 61.9

2 comments Written on August 8th, 2010 by
Categories: PMI

Markit’s released India’s HSBC Purchasing Managers’ Index for July 2010. The index fell to 61.9 in July, down slightly from 62.8 in June. Remember, the PMI is an oscillator around 50 – meaning, a number above 50 means expansion, and below 50 is contraction, compared to the earlier month.


Nothing to worry about, yet. The markit piece says inflation’s a problem.