India's Manufacturing PMI Remains Resilient At 55.3 In October

A gauge of activity across India's manufacturing sector remained resilient in October, while price pressures were contained.

The India Manufacturing Purchasing Managers' Index stood at 55.3 in October against 55.1 in September, according to a media statement by IHS Markit. A reading above 50 indicates expansion.

Firms were again able to secure additional work in October, taking the current sequence of growth to 16 months, the release said. Overall, factory orders increased at an above-trend pace that was nonetheless the weakest since June.

Growth was linked to ongoing improvements in demand and enhanced technology. Indian manufacturing companies bought additional inputs in October amid efforts to rebuild stocks and fulfil greater sales.

New export orders also rose markedly, with the pace of expansion ticking higher.

Price pressures were little changed from September. The overall rate of cost inflation was the second-weakest in two years. In turn, manufacturers limited hikes to output prices. The rate of charge inflation eased to the weakest since February.

Inventory trends diverged noticeably in October. Holdings of finished products fell, while pre-production stocks increased markedly. There were signs of substantial capacity pressures on Indian goods producers, as outstanding business volumes rose to the greatest extent in almost two years. Some firms responded to this by hiring extra workers. "Manufacturing employment increased at a marked rate that was one of the strongest since data collection started in March 2005."

Looking ahead, Indian manufacturers remained confident of a rise in production volumes by October 2023. Predictions of better sales and marketing efforts were among the reasons cited for upbeat projections. Granular data indicated that consumer goods were the brightest area of the manufacturing sector in October. Firms in this segment signalled the fastest increases in output, overall sales and exports.