The HSBC Flash India Composite Purchasing Managers’ Index, compiled by S&P Global, rose to 58.6 in October from September’s final figure of 58.3, which was at a 10-month low. The earlier estimate for September was 59.3. The index has now remained above the 50 mark for 39 consecutive months.
The flash figure for the current month is lower than 61.2 in January. On average, it was 60.5 during the first 10 months of this year, compared to 59.9 in the corresponding period last year.
The manufacturing sector regained growth momentum in October, with various components showing improvement after a modest slowdown in the last two to three months, noted Pranjul Bhandari, chief India economist at HSBC. “New orders and new export orders expanded at faster rates, providing a good omen for industrial production for the remaining months of 2024,” she added.
There was a significant increase in new orders in October, driven by strong demand trends and improved international interest in Indian goods and services, as per the survey. This growth also led to an increase in employment, which rose at the fastest rate in around 18-and-a-half years. Job creation was more prominent in the services sector.
The survey indicated that input cost inflation at the composite level reached its highest in three months, with increases noted in chemicals, eggs, meat, packaging, steel and vegetables. “Manufacturers’ profit margins are still under pressure as input price inflation continues to pick up pace. Manufacturers are trying to pass on higher costs to downstream consumers by raising output prices,” said Bhandari.
The outlook was mixed at the sub-sector level, the survey noted. While business sentiment among manufacturers hit its highest level since July, it dipped for service companies. Overall, however, the sentiment among the private sector remained above its long-run average.