New Delhi: India’s manufacturing sector recorded another strong expansion in October, despite softer increases in output and new orders, as the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) stood at 54.7 last month.
Export sales provided support, with growth reaching a six-month high, while price pressures eased.
Firms continued to add jobs and build inventories, although hiring was subdued, and business confidence weakened, according to the data compiled by S&P Global.
At 54.7 in October, the PMI was comfortably above the neutral mark of 50.0, thereby signalling a strong improvement in the health of the sector.
The headline figure fell from 55.1 in September but remained above its long-run average.
“India’s manufacturing PMI softened to 54.7 in October from 55.1 in the previous month but remained firmly in expansionary territory and above its long-run average. Strong international demand pushed growth of new export orders to a six-month high, supporting a robust rise in output,” said Pranjul Bhandari, Chief India Economist at HSBC.
Producers also increased input inventories to the greatest extent in eight months, building precautionary buffers to mitigate potential shortages and meet rising production requirements amid a volatile global environment.
Although some material and energy costs increased, overall input and output price pressures eased slightly from the previous month, said the economist.
A sustained improvement in demand was reflected in a further sharp rise in new business. Growth eased only marginally from September’s seven-month high and remained strong by historical standards.
“Panel members cited favourable demand trends, new client wins and successful marketing campaigns,” said the data.
Overseas markets contributed to the upturn, as new export orders increased at the fastest rate in six months. Companies reported gains from a broad range of destinations, including Bangladesh, Canada, Indonesia, Nepal, Oman, Saudi Arabia,
Sri Lanka, the UK, the US and the UAE.
Supported by rising sales and new product releases, firms lifted output at a sharp rate that exceeded its long-run average.
(IANS)
