India's manufacturing activities gain further strength in October
Indian companies also observed a notable increase in international demand for their goods
India’s manufacturing sector activities gained more strength in October, with companies scaling up production and stepping up input purchasing in anticipation of further improvements in demand, according to a monthly survey. Output and new orders increased at faster rates in seven months, owing to robust gains in production growth in October, while business optimum hitting a six-month high, the survey said.
The IHS Markit India Manufacturing Purchasing Managers Index (PMI) which is seasonally adjusted increased from 53.7 in September to 55.9 in October, highlighting the strongest improvement in overall operating conditions since February.
Upturn in new work orders was sharp since March
For the fourth straight month, the PMI data in October pointed to an improvement in overall operating conditions. A score above 50 means expansion, while a score below 50 indicates a contraction.
According to the survey, the upturn in new work orders was sharp and the fastest in seven months, while factory output increased at an increasing pace which was the strongest since March.
Should the pandemic remain under control, manufacturing activity will continue to expand throughout the third quarter of fiscal year 2021/22, with companies gearing up for further improvements in demand by building up their stocks.
Indian companies also observed a notable increase in international demand for their goods. New export work had risen at a solid pace that was the fastest in three months.
Upbeat business confidence and projects in the pipeline should also support production in the coming months, the index noted.
From the perspective of the price, the overall rate of input cost inflation increased to a 92-month high. Higher chemical, fabric, metal, electronic components, oil, plastic and transportation costs have been highlighted by anecdotal evidence.