Strong demand revives manufacturing PMI to 57.5 in October after an 8-month low

India's manufacturing sector showed a revival in growth at the beginning of the third quarter of the financial year, with the HSBC final India Manufacturing Purchasing Managers' Index (PMI) rising to 57.5 in October from an eight-month low of 56.5 in September. This increase was driven by a stronger rise in new orders and international sales, with companies reporting enhanced sales performance due to new product introductions and successful marketing initiatives. Notably, new export orders also saw significant growth after a weak uptick in September, fuelled by demand from regions including Asia, Europe, and the US.

The survey highlighted that production volumes were ramped up, particularly in consumer and investment goods, supported by favourable market conditions and positive sales pipelines. Employment in the manufacturing sector also increased, with about 10% of panellists hiring additional staff, contributing to a decline in backlogs for the first time in over a year. However, inflationary pressures persisted, with input prices rising to a three-month high, driven by costs associated with materials, labour, and transportation, while output prices also increased significantly, reflecting ongoing inflationary trends within the sector.

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