India's Manufacturing Surge: October PMI Hits New High

India’s manufacturing sector sees robust growth in October with the PMI rising to 57.5, driven by increased domestic and international demand. This indicates the strongest performance since early 2024, as businesses boost production and hiring while facing rising input costs.

India's manufacturing sector witnessed significant growth in October, as evidenced by the HSBC India Manufacturing Purchasing Managers' Index (PMI) climbing from September's 56.5 to an impressive 57.5. This marks the strongest performance since early 2024, largely attributed to the surging domestic and international demand, buoyed by new orders and heightened production levels.

The latest data from HSBC, compiled by S&P Global, shows a rapid expansion in both new orders and exports during October, driven by increased demand from regions such as Asia, Europe, Latin America, and the U.S. Businesses credit the introduction of new products and effective marketing campaigns as major contributors to this sales boost. Consequently, production levels soared, especially in consumer and investment goods sectors.

To accommodate this increased demand, companies heightened their purchases of raw materials, with suppliers managing to meet these requirements efficiently. The uptick in activity spurred hiring across manufacturing firms, with nearly 10% reporting the addition of new jobs. However, rising input costs such as raw materials, labor, and transportation have contributed to a three-month high in input price inflation.

Pranjul Bhandari, Chief India Economist at HSBC, remarked, "In October, India's headline manufacturing PMI rose markedly as the economy's operating conditions improved broadly. The rapid uptick in new orders and international sales underscores robust demand growth for India's manufacturing sector." She also noted that inflationary pressures are pushing up both input and output prices due to elevated costs in materials, labor, and transportation. Bhandari highlighted that business confidence remains high as the third fiscal quarter commences, fueled by expectations of sustained consumer demand, fresh product launches, and pending sales approvals.

As a countermeasure to the rising costs of operation, companies have increased their selling prices, linking this move to the necessity of offsetting higher business expenditures. (ANI)

(With inputs from agencies.)