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India’s manufacturing sector gained significant momentum in October, supported by robust domestic demand, according to a recent survey released on Monday. The HSBC India Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, climbed to 59.2 in October from 57.7 in September, surpassing the earlier estimate of 58.4. A PMI above 50 signals expansion, highlighting the sector’s sustained growth. Production accelerated to match the joint-strongest pace in five years, equaling August’s growth. Manufacturers attributed this surge to strong demand, efficiency improvements, technology investments, and an influx of new clients. Export Growth Slows, But Output Remains Strong While domestic demand powered manufacturing growth, export orders expanded at their slowest pace in 10 months. Despite this slowdown in international sales, the increase in new export orders remained substantial, added the report. Input costs moderated, dropping to an eight-month low, yet output price inflation persisted at near 12-year highs for the second month in a row. Companies reported that rising freight and labour expenses were passed on to customers, while robust demand allowed them to maintain higher prices. “Robust end-demand fuelled expansions in output, new orders, and job creation. Meanwhile, input prices moderated in October while average selling prices increased as some manufacturers passed on additional cost burdens to end-consumers,” said Pranjul Bhandari, chief India economist at HSBC. Employment And Business Sentiment Employment continued to expand for the 20th consecutive month, with firms hiring to meet growing workloads. However, the pace of job creation remained moderate, mirroring September’s figures, added the report. Looking ahead, the future output sub-index, which gauges business optimism, dipped slightly from September’s seven-month high but remained strong. “Looking ahead, future business sentiment is strong due to positive expectations around GST (goods and services tax) reform and healthy demand,” added Bhandari.
