India’s manufacturing activity witnessed a marginal moderation in October, with the HSBC India Manufacturing Purchasing Managers’ Index (PMI) declining to 54.7 from 55.1 in September. However, the sector continued to register expansion, supported by strong domestic and international demand, while price pressures eased during the month.
According to data released by S&P Global, the manufacturing PMI remained comfortably above the neutral mark of 50, indicating sustained growth in the sector. The index also stayed above its long-term average.
Growth in new business remained strong, with new export orders recording their fastest expansion in six months. Manufacturers reported increased demand from several international markets, including Bangladesh, Canada, Indonesia, Nepal, Oman, Saudi Arabia, Sri Lanka, the United Kingdom, the United States and the UAE.
The rise in overseas demand supported a sharp increase in factory output, although the pace of production growth moderated compared to September. The report attributed the growth in new business to favourable demand conditions, new client acquisitions and successful marketing campaigns.
Meanwhile, price pressures eased during October. Input cost inflation declined to its lowest level since February, while the increase in selling prices was the weakest in nearly four years. Although manufacturers reported higher prices for certain raw materials and energy, overall cost pressures moderated across all three broad manufacturing categories.
Commenting on the trends, Pranjul Bhandari, Chief India Economist at HSBC, said strong international demand pushed export order growth to a six-month high, supporting a robust increase in output.
She added that manufacturers increased their input inventories at the fastest pace in eight months, building precautionary buffers to address potential supply shortages and meet rising production requirements amid global uncertainties.
Factory employment also increased for the second consecutive month, although the pace of job creation remained modest. Meanwhile, finished goods inventories recorded their sharpest rise, as companies sought to meet demand and prevent potential shortages.
Despite the continued expansion, business confidence remained subdued. The report noted that optimism among manufacturers declined from September and remained below its long-term average.
Around 18 per cent of manufacturers expected output to increase over the next 12 months, citing new client enquiries and rising demand for industrial automation and technology solutions.
Overall, the October PMI data point to continued resilience in India’s manufacturing sector, with stronger export demand and easing input cost pressures providing support, even as business confidence remains cautious.
-ANI
