Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

PMI Services logs a record high, Employment scenario, however, remains a concern

Posted On: 2023-05-07 13:51:46 (Time Zone: IST)


The fiscal year has begun on an encouraging note for the economy with an upturn in S&P PMI indices on manufacturing and services sectors published by S&P Global. PMI Manufacturing index rose to a four month high of 57.2 in Apr-23 from 56.4 in Mar-23 and significantly higher than the 54.7 recorded in Apr-22. Importantly, the PMI Services index has reached an all time high of 62.0 vis-à-vis 57.8 in Mar-23 and 57.9 in Apr-22. This also led the PMI Composite index to climb to a record high of 61.6 in Apr-23.

The latest PMI Manufacturing report for April-23 highlights that the operating environment for Indian manufacturing sector has become relatively more favourable with the rise in factory orders and production rose "at the strongest rates in calendar 2023 so far", with companies ramping up input purchases to replenish stocks after the year end. Interestingly, more than one-quarter (26%) of all survey participants reported higher production volumes, citing sustained expansions in sales. The manufacturers also benefited from relatively mild price pressures, better international sales and improving supply-chain conditions. Despite the surge in purchasing activity, suppliers were able to deliver inputs in a timely manner during April. Although marginal, there was an upturn in employment in the manufacturing sector compared with a fractional reduction in March. Indian manufacturers exhibited confidence that production volumes would be higher in 12 months' time, amid demand resilience, client enquiries, orders pending approval and marketing efforts; the overall level of positive sentiment rose since March.

What is noteworthy is the spurt in the PMI Services index in Apr-23 to a record high beyond sixty. S&P Global says that "Service sector growth in India quickened substantially in April, with demand strength promoting the fastest increases in new business and output in close to 13 years." Among the four monitored sub-sectors, the strongest increase in output was seen in Finance & Insurance. The survey participants highlighted an intensification of price pressures, with input costs and output charges rising at faster rates that exceeded their respective long-run averages. New export contracts expanded for the third month in succession and the pick-up in demand occurred in spite of escalating price pressures. The combination of rising input costs and demand resilience enabled the sector to raise their billing rates in April. Nevertheless, such optimism has not had any significant impact on job creation. The report says, "Despite the substantial pick-up in sales growth and improved business sentiment, the increase in employment seen in April was negligible and failed to gain meaningful traction."

Given the rise in both indices, the PMI Composite index also touched a new high of 61.6 in Apr-23. The data indicates a substantial increase in output across the Indian private sector but hiring remained mild.

Says Suman Chowdhury, Chief Economist and Head-Research, Acuité Ratings & Research "PMI indices raise hopes that domestic consumption will continue to witness a healthy growth in H1FY24 with moderation of inflationary pressures. The services sector remains particularly buoyant with strong demand in travel and hospitality segment during the summer vacation. Nevertheless, the impact of increased interest rates and global uncertainties on domestic investment activity is likely to be visible. While the surveys indicate continuing business optimism, it's not yet reflected in a meaningful pickup in hiring be it manufacturing or services. The monsoon and its effect on agriculture sector is clearly an additional risk factor as of now. Our base forecast of India's GDP growth in FY24 continues to be at 6.0%, with some downside risk."


Click here to send ur comments or to feedback@equitybulls.com

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

CRISIL Ratings: Agrochemicals sector to see 7-9% growth amid modest exports

SBI Capital Markets: RBI Monetary Policy Dec'24 - RBI faces arduous task of managing all dynamics: Liquidity, Currency, Growth and Inflation

SBICAPS Monthly Ecocapsule Dec'24 : FY25 - A TALE OF TWO HALVES OR ONE OF FULL DESPAIR? - Executive Summary

CRISIL Ratings: Revenue growth of organised luggage makers to halve to 8-10%

CRISIL Ratings - Cement demand to grow at a moderate pace of 7-8% this fiscal

CRISIL Ratings: For small finance banks, RoA to dip ~40 bps this fiscal

Securitisation volumes witness strong growth; likely to reach ~Rs. 60,000 crore in Q2 FY2025: ICRA

CRISIL Ratings: Operating losses of state discoms to stay high despite 15-20% dip

CRISIL Ratings: Tamil Nadu garment exporters to see 8-10% revenue growth

CRISIL MI&A: Inflated natural rubber prices to puncture tyre maker margins

Infrastructure bond issuances by public sector banks to drive banks' bond issuances to an all-time high in FY2025: ICRA

CRISIL Ratings: Apparel retailers to stitch 8-10% growth with festivals, fast fashion

CRISIL Ratings: For ARCs, rising power consumption to boost recoveries from stressed operational thermal plants

Views of ICAI on SA 600 vs ISA 600

CRISIL Ratings: Wagon makers set to roll in ~20% revenue growth this fiscal

CRISIL Ratings: Basmati industry to see revenue grow ~4% on a high base this fiscal

CRISIL: Pharmaceutical sector set for 8-10% revenue growth this fiscal

CRISIL Ratings: Flexible packaging players' credit profiles to stay subdued this fiscal

Industry credit expected to grow over 12 per cent: FICCI-IBA Bankers' Survey

CRISIL Ratings: Decadal-low duty to push gold jewellery retailers' revenues up by 22-25%

CRISIL Ratings: Education loan AUM of NBFCs to top Rs 60,000 crore this fiscal

Evolving asset quality risks to impact growth and profitability of microfinance: ICRA

Near-term Consolidation; Focus Remains on Style & Sector Rotation - Axis Securities

CRISIL Ratings: Paper packaging volume to grow, but profitability to plumb lows

CRISIL MI&A: Corporate revenue growth likely moderated to 5-7% in April-June, the slowest in 15 quarters

CRISIL Ratings: Revenue growth of auto dealers to enter the slow lane this fiscal

Declining liquidity coverage ratios to slow down credit growth for banks: ICRA

CRISIL Ratings: Road developers to see slower revenue growth of 5-7% next fiscal

CRISIL Ratings: Small finance banks to grow advances 25-27% this fiscal

Global monetary easing to pick up pace - Puneet Pal, Head-Fixed Income, PGIM India Mutual Fund

Kotak Institutional Equities: Strategy: 1QFY25: Converging trends

CRISIL Ratings: Cement makers line up ~Rs 1.25 lakh crore capex over fiscals 2025-27

CRISIL Ratings: Urea import dependency to fall to 10-15% from this fiscal

CRISIL Ratings: 20% ethanol blending goal means more sugarcane utilisation

Kotak Institutional Equities: Automobiles & Components: 1QFY25 review: Steady quarter; demand outlook weakening

CRISIL MI&A: Macroeconomics First Cut - Goods exports fall, services soften

Kotak Institutional Equities: Consumer: 1QFY25 review- Uptick in staples, continued weakness in discretionary

CRISIL Ratings: Despite cash disbursement restriction gold-loan NBFCs shine

SBICAPS Report - The Green Pill: Labelled Bond Issuances, ESG Indices, Global Sustainable Funds

We expect the 10 yr benchmark bond yield to keep drifting lower gradually - PGIM India Mutual Fund

Strategy: Faith, froth and fundamentals by Kotak Institutional Equities

Earnings growth should be the key driver of returns hereon - Vinay Paharia - CIO, PGIM India Mutual Fund

IT Services: ERD services: Auto pulse-challenges ahead - Kotak Institutional Equities

Banks, Diversified Financials : Strong on expected lines across BFSI - Quarterly Review - Kotak Institutional Equities

Metals & Mining: SC ruling-empowers the states; marginal negative impact - Kotak Institutional Equities

CRISIL Ratings: Revised deposit norms unlikely to be onerous for HFCs

CRISIL Ratings: 6 gigawatt renewable energy storage to be added by fiscal 2028

CRISIL Ratings: Thermal share in power generation to dip over 500 bps next fiscal

Indian bond market issuances exceeded $105 billion, $25 billion new equity issued in FY24 - Shri Pramod Rao, ED, SEBI

One third of Nifty 100 companies hire thousands of young talent on apna.co


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020