Manufacturing PMI jumps to 55.9 in Oct; expands for fourth straight month

Manufacturing Purchasing Managers’ Index (PMI) was in expansion territory for the fourth straight month, according to data compiled by IHS Markit India. PMI was recorded at 53.7 in September.

“At 55.9 in October, the seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) was in expansion territory for the fourth month in a row. Moreover, rising from 53.7 in September, the latest gure pointed to the strongest improvement in overall operating conditions since February,” the report said.

Manufacturing sector growth gained steam in October as companies scaled up production. Input purchasing by firms saw an uptick amid stock-building efforts and to further improve demand as business optimism hit a six-month high, stated the report.

“Amid reports of improved market confidence, rising requirements among clients and successful marketing, new orders continued to expand in October. The upturn was sharp and the fastest in seven months. Similarly, factory output increased at a sharp pace that was the strongest since March,” it said.

While sales and production saw a strong growth in each of the three broad areas of the manufacturing section, intermediate goods saw the sharpest rates of expansion.

The IHS Markit India report stated, “In addition to reporting a substantial increase in total new orders, Indian companies observed a notable pick-up in international demand for their goods. New export work rose at a solid pace that was the quickest in three months.”

To keep up with production schedules, manufacturers bought additional inputs in October and quantities of purchase rose the fastest since April. However, companies also noted a further increase in supplier prices. “The overall rate of input cost inflation surged to a 92-month high. Anecdotal evidence highlighted higher chemical, fabric, metal, electronic component, oil, plastic and transportation costs,” it stated.

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