Manufacturing sector growth in India gathered momentum in October as firms responded to stronger order inflows by scaling up production, input purchasing and employment. Price gauges
continued to point to upward inflationary pressures, but were similar to September’s readings. Inventory trends varied, with companies utilising stocks of finished goods to satisfy greater demand whilst rebuilding their input holdings. Rising from 52.2 in September to 53.1 in October,
the Nikkei India Manufacturing Purchasing Managers’ Index® (PMI®) highlighted the joint strongest upturn in the health of the sector in 2018 so far. Moreover, the current growth spell was stretched to 15 months.
Ongoing improvements in demand, coupled with technological advancements and favourable market conditions, prompted a stronger upswing in production. The rate of output growth was the second-highest registered in the year-to-date, with accelerations evident in the consumer, intermediate and investment goods sectors.
New orders increased solidly during October, which panellists attributed to successful advertising efforts, strengthening underlying demand and competitive price setting. The rise was the fastest since June. Whereas growth of total new orders gathered pace, the upturn in export sales cooled at the start of the fourth quarter. The expansion was the weakest in three months and below the long-run series average.
Manufacturers stepped up hiring in October, with job creation the strongest since last December. In turn, businesses were able to lower their outstanding business volumes for the second straight month.
(Continued on the next page)
"Manufacturing continued to make up for ground lost in August, with a robust and accelerated rise in new orders boosting production growth in October." - Pollyanna De Lima, Principal Economist at IHS Markit & author of the report