Even as companies continued to have concerns over the GST, Dodhia says business confidence strengthened among manufacturers as they reportedly anticipate long-term benefits from recent government policies. This was confirmed as the sector experienced gains in employment.
The introduction of the GST as well as higher prices for steel and petroleum products reportedly increased cost pressure in September. The rate of inflation was modest, and remained below the long-run series average. Firms raised prices to protect margins amid inflationary pressures. Nonetheless, due to competitive conditions, they were able to increase output charges at a marginal pace.
Destocking continued at the end of the third quarter, with both pre- and post-production inventories reducing. The latter decreased at a fast pace.