India's Manufacturing Sector Regains Growth Momentum in October: PMI

New Delhi: India's manufacturing sector growth recovered from September's eight-month low to 57.5 in October fuelled by faster increases in total new orders and international sales, a monthly survey said on Monday.

seasonally justed HSBC India Manufacturing Purchasing Managers' Index (PMI) rose from September's eight-month low of 56.5 to 57.5 in October, indicating a substantial and accelerated improvement in operating conditions.

In PMI parlance, a print above 50 means expansion, while a score below 50 denotes contraction.

"India's heline manufacturing PMI picked up substantially in October as economy's operating conditions continue to broly improve. Rapidly expanding new orders and international sales reflect strong demand growth for India's manufacturing sector," Pranjul Bhandari, Chief India Economist at HSBC, said.

upturn in performance was boosted by stronger demand for Indian goods. Moreover, introduction of new products and successful marketing initiatives helped enhance sales performance.

New export orders also exhibited stronger growth, following weakest uptick in a year-and-a-half during September. Panel members reported gains in new contracts from Asia, Europe, Latin America and US.

On prices front, October data signalled stronger inflationary pressures across India's manufacturing sector.

Goods producers were also more willing to take on ditional staff, which coupled with rising material costs, ded to business expenses. Both input prices and selling charges increased at stronger rates.

"Input and output prices are both increasing as a result of persistent inflationary pressures in materials, labour and transportation costs," Bhandari ded.

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

Going ahe, Indian manufacturers became more optimistic regarding future output volumes.

"To start third fiscal quarter, business confidence is also very high due to expectations of continued strong consumer demand, new product releases and sales pending approval," Bhandari said.

HSBC India Manufacturing PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.