India's Manufacturing Industry Regains Growth Momentum as Hiring Increases in Services Sector

Indian manufacturing, which had lost its growth momentum in the previous month, regained this in October with more rapid acceleration in factory production and services activity, according to a new report. India's private sector economy continues to grow at strong rates, it said in its latest HSBC "flash" PMI survey compiled by S&P Global (NYSE:SPGI).

Employment in the services sector increased more rapidly. The gain in jobs was the largest since April 2005 and the most rapid in 18-and-a-half years. Yet employment continued to grow at a positive rate in the manufacturing sector and allowed the composite payroll counts to continue rising at the sharpest rate since February 2006.

Full-time and part-time workers reportedly were hired. Permanent as well as temporary positions reportedly were available.

"Several components picked up after a moderate easing over the last two to three months. New orders and new export orders increased at a faster pace and, therefore, bodes well for industrial production over the remaining months of 2024," said HSBC's Chief India Economist, Pranjul Bhandari.
A quicker increase in new work inflows snapped the cautionary sentiment that prompted firms to increase business activity and hire more workers.

In October, the build-up in growth momentum came with a strengthening of price pressures. Manufacturers performed better than service providers in terms of growth rates for output and sales, but also reported faster increases in input costs and selling charges.

Both manufacturing and service sectors in India were inside growth territory (above 50.0) for the thirty-ninth consecutive month.

According to the survey, Indian businesses saw a sharp increase in new order intakes during October. The expansion-which was largely driven by positive demand trends-was also stronger than that recorded in September.

According to the latest data, part of the turnaround in total new orders was buoyed by an increase in international demand for Indian goods and services. Rates of expansion in export sales quickened at manufacturing firms and their services counterparts, it added.