India’s manufacturing PMI falls to 54.7 in October

India’s manufacturing activity expanded at a slower pace in October as growth in output and new orders moderated following a recovery in September, according to a private survey released on Monday.The HSBC India Manufacturing Purchasing Managers’ Index (PMI), which tracks monthly changes in manufacturing activity, declined to 54.7 in October from 55.1 in September. The latest reading was also slightly below the flash estimate of 54.9 released last month.
Despite the moderation, the index remained above the 50-point threshold, indicating continued expansion in manufacturing activity. October marked the 60th consecutive month of growth in the sector.“India’s manufacturing PMI softened to 54.7 in October from 55.1 in the previous month, but remained firmly in expansionary territory and above its long-run average. Strong international demand pushed growth of new export orders to a six-month high, supporting a robust rise in output,” said Pranjul Bhandari, Chief India Economist at HSBC.
Growth in new domestic orders eased from September’s seven-month high, while new export orders increased at their fastest pace in six months. According to the survey, Indian manufacturers reported stronger demand from several international markets, including Bangladesh, Canada, Indonesia, Nepal, Oman, Saudi Arabia, Sri Lanka, the UK, the US and the UAE.Manufacturing output continued to increase sharply in October, although the pace of growth slowed compared with September. The moderation was largely driven by slower expansion among intermediate goods manufacturers, the survey noted.
Meanwhile, input cost pressures eased across all three broad segments of India's manufacturing industry covered by the survey. Although manufacturers reported higher prices for certain raw materials and energy, the overall rate of input cost inflation fell to its lowest level since February.“Indian goods producers raised selling prices to protect margins, but the increase was only slight and the weakest in just under four years,” S&P Global said.Factory employment also increased during October as production requirements and workloads rose. However, the pace of job creation slowed compared with previous months, while employment in the capital goods segment declined.Manufacturers also increased their input inventories at the fastest pace in eight months, building precautionary stocks to guard against potential supply shortages and meet rising production requirements amid global uncertainty.Bhandari said that despite increases in the costs of some materials and energy, overall input and output price pressures eased slightly from the previous month.

(Business Correspondent)