Manufacturing Regains Growth In Oct, PMI Up At 57.5

Driven by improved demand boosting job creation and a positive business outlook, India‘s manufacturing growth revived in October after registering deceleration for three months. The HSBC final India Manufacturing Purchasing Mangers’ Index, compiled by S&P Global, rose to 57.5 in October from an eight-month low of 56.5 in September.

The business survey’s numbers came in above the preliminary estimate of 57.4 for the month. With a notable increase in demand, the output and new order sub-indexes also reached a three-month high during the month. As far as the international demand is concerned, it improved from a year-and-a-half low in September.

“India’s headline manufacturing PMI picked up substantially in October as the economy’s operating conditions continue to broadly improve. Rapidly expanding new orders and international sales reflect strong demand growth for India’s manufacturing sector. Meanwhile, input and output prices are both increasing as a result of persistent inflationary pressures in materials, labour, and transportation costs,” stated Pranjul Bhandari, Chief India Economist at HSBC.

The upturn in performance was boosted by stronger demand for Indian goods. Companies noted a quicker increase in order book volumes that was stronger than the average seen in nearly 20 years of data collection.

On the employment front, not only did manufacturers hire extra staff at the start of the third fiscal quarter, but also to a greater degree than in September. As per the survey, around one in ten panellists reported an increase in employment, while 1 per cent shed jobs.

“October data signalled stronger inflationary pressures across India's manufacturing sector. Input price inflation quickened to a three-month high, though remained below its long-run trend. Meanwhile, output prices increased at a solid rate that outpaced the series trend. Monitored firms highlighted freight,” as per the report.

Production volumes were ramped up to a greater degree in October, fuelled by faster increases in the consumer and investment goods categories. When explaining the latest upturn in output, companies remarked on demand buoyancy, positive sales pipelines and favourable market conditions.