India’s manufacturing growth accelerates in October: PMI

India's private sector manufacturing rebounds in October, showing growth in new orders and international sales, boosting business confidence.

Manufacturing activity in India’s private sector recovered in October, breaking a three-month streak of deceleration after hitting an eight-month low in September, as per the survey-based HSBC India Manufacturing Purchasing Managers’ Index (PMI) which inched up to 57.5 from 56.5 in the previous month.

A reading of over 50 on the index indicates an expansion in activity.

The 400-odd factories surveyed for the index by S&P Global Market Intelligence reported an acceleration in output growth in October, with new orders and international sales driving the uptick.

Fresh export orders rebounded in October, after rising at the mildest pace in 18 months during September, with firms reporting new deals from clients in Asia, Europe, Latin America and the US.

Production volumes increased, led by robust gains in the consumer and investment goods categories, with companies referring to demand buoyancy, positive sales pipelines and favourable market conditions as key factors.

However, inflation pressures increased as input costs rose at a three-month high pace, with firms attributing most of these pressures to freight, labour and material costs. In response, companies opted to increase their output price at a solid rate that outpaced the trend.

India’s inflation rose to a nine-month high of 5.49% in September, largely driven by higher food prices and close to the upper end of the Reserve Bank of India’s (RBI) 2-6% target.