India Manufacturing PMI Expands In October Amid Strong Demand
The HSBC India Manufacturing Purchasing Managers’ Index rose from September's eight-month low of 56.5 to 57.5 in October.
India's manufacturing activity expanded in October amid improvement in operating conditions that boosted stronger demand for Indian goods, a private survey showed on Monday.
The HSBC India Manufacturing Purchasing Managers’ Index rose from September's eight-month low of 56.5 to 57.5 in October, indicating a substantial and accelerated improvement in operating conditions. The upturn in performance was boosted by stronger demand for Indian goods, according to a press release on Monday.
Companies noted a quicker increase in order book volumes that was stronger than the average seen in nearly 20 years of data collection. Anecdotal evidence suggested that the introduction of new products and successful marketing initiatives helped enhance sales performances.
New export orders also exhibited stronger growth, following the weakest uptick in a year-and-a-half during September. 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.
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, labour and materials as the key sources of price pressures.
Not only did manufacturers hire extra staff at the start of the third fiscal quarter, but also to a greater degree than in September. Around one-in-10 panellists reported an increase in employment, while 1% shed jobs.
An increased appetite for safety stocks, supported by shorter lead times, was reflected in another substantial rise in pre-production inventories. October's accumulation was one of the most marked in close to 20 years of data collection. The trend for stocks of finished goods continued to diverge from that of inputs, as firms again utilised inventories to fulfil sales needs.
Indian manufacturers became more optimistic regarding future output volumes. Rising since September, the level of positive sentiment was above the average seen over the 13-and-a-half-year series history.
