India's Manufacturing Sector Rebounds In October As PMI Rises To 57.5
The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index rose to 57.5 in October, up from 56.5 in the previous month
India's manufacturing sector regained momentum in October, recovering from an eight-month low recorded in September, according to a recent survey. The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) rose to 57.5 in October, up from 56.5 in the previous month, driven by strong demand, increased new orders, and a boost in international sales.
The PMI reading above 50 signals expansion in the sector, with scores below 50 indicating contraction. The rise in October reflects a "substantial and accelerated improvement in operating conditions," according to HSBC. "India's headline manufacturing PMI picked up substantially in October as the economy's operating conditions continue to improve," said Pranjul Bhandari, Chief India Economist at HSBC. "Rapidly expanding new orders and international sales reflect strong demand growth for India's manufacturing sector."
The sector's performance was buoyed by strong domestic demand as well as increased international orders. New export orders also grew in October, bouncing back after a sluggish September, which saw the weakest increase in exports in 18 months. Manufacturers reported new contracts from key markets, including Asia, Europe, Latin America, and the US.
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The survey also highlighted heightened inflationary pressures within the sector. Rising costs for materials, labour, and transportation contributed to higher input prices and selling charges. Manufacturers showed increased willingness to hire additional staff, with employment growth outpacing that of September as one in ten surveyed manufacturers reported increased hiring.
"Input and output prices are both increasing due to persistent inflationary pressures in materials, labour, and transportation costs," Bhandari noted. As the third fiscal quarter begins, manufacturers expressed strong confidence in continued growth. Positive expectations around consumer demand, new product launches, and approvals of pending sales are driving optimism for future output volumes.
The HSBC India Manufacturing PMI, compiled by S&P Global, is based on responses from purchasing managers at about 400 manufacturers across India, tracking business conditions in the sector monthly.