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The
seasonally adjusted manufacturing PMI slipped to 65.4 points in
October from 68.1 in September but remained well within growth
territory.
"Procurement problems are likely to be among the factors
contributing to a slowdown in output. Suppliers' delivery times
are still rising, albeit somewhat less broadly than in the
previous months. Moreover, purchase prices are widely
increasing, with 82% of the respondents facing higher costs for
input materials," said economist Claude Maurer at Credit Suisse,
which helps compile the index.
Procurement uncertainties have prompted businesses to replenish
inventories, with stocks of finished goods now being topped up
as well as stocks of purchases, he added.
"Higher inventories are something of a double-edged sword for
companies, as while they allow goods to be dispatched quickly
when demand rises, they become a burden when demand drops. Given
the generally positive momentum at present, the trend in
inventories is probably a favourable sign for the time being,"
Maurer said.
The pace of workforce expansion was relatively muted despite
solid levels of capacity utilisation and widespread scarcity
problems. Only a quarter of businesses were recruiting staff.
The service sector PMI, which is more focused on domestic
consumption, also edged lower in October, but momentum remained
higher than average and prices were climbing on a broad scale.
(Reporting by Michael Shields; Editing by Toby Chopra)
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