Recovery seen for India's manufacturing growth. The country's production-based sector grew for the fifth month in October but with a slower expansion and had the weakest expansion after an eight-month-low increase registered in September to 57.5 percent according to a monthly survey carried out on Monday.
Increases recorded in total new orders, international sales in higher-than-previous-level of gains fueled the jump seen as being substantial and an improvement was accelerated in conditions about production.
In PMI terms, any reading above 50 is expansionary while below 50 denotes contraction.
"India's headline manufacturing PMI accelerated significantly in October as the operating conditions of the economy remain broadly improving. Rapid expansion in new orders and overseas sales reflect strong growth in demand for India's manufacturing sector," said Pranjul Bhandari, Chief India Economist at HSBC.
Stronger demand for Indian goods boosted the uptick in performance. Further, new products and successful marketing efforts helped to improve sales performance.
New export orders too showed a stronger growth compared to the weakest uptick in a year-and-half in September. Panel members have reported gains in new contracts from Asia, Europe, Latin America, and the US.
It appeared that the inflationary trends strengthened in India's manufacturing industry on the prices front as well, the October numbers showed.
The goods manufacturers were more yielding to paying additional labor forces, except for the increase in raw material costs added to overall costs of doing business. Prices of inputs as well as selling charges accelerated at greater rates.
"Both input and output prices are escalating due to continued inflationary pressures in material, labour, and transportation costs," said Bhandari.
On the labor front, manufacturers not only added more employees at the beginning of the third fiscal quarter but also to a greater extent than in September. One in ten respondents cited an expansion in employment, while 1% experienced a decline.
Indian manufacturers meanwhile grew even more positive about future volumes of output.
Business confidence is also very high as the third fiscal quarter is expected to have continued strong consumer demand, new product releases and sales pending approval," Bhandari said.
The HSBC India Manufacturing PMI is based on responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.
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