India manufacturing PMI eases to 54.7 in October
Export orders reached a six-month high even as the pace of manufacturing expansion moderated from September.
India's manufacturing activity slowed in October, with the HSBC India Manufacturing Purchasing Managers' Index (PMI) falling to 54.7 from 55.1 in September, according to reports by Times of India, BusinessLine and The Tribune. Despite the dip, the index remained above the neutral 50 mark and its long-run average, indicating continued sector expansion.
New export orders grew at their quickest rate in six months. Manufacturers saw increased interest from several international markets, such as the US, UK, Canada, Saudi Arabia, UAE, Bangladesh, Indonesia, Nepal, Oman and Sri Lanka. Pranjul Bhandari, chief India economist at HSBC, said strong international demand supported a robust rise in output.
While factory output rose, the speed of production growth was lower than in September. Companies increased their finished goods stocks at a record pace in the survey's 21-year history, while input inventories grew at their fastest rate in eight months to prepare for potential shortages.
Input cost inflation dropped to its lowest point since February, and the rise in selling prices was the weakest in nearly four years. Although some energy and material costs rose, overall price pressures across the manufacturing industry moderated.
Factory employment grew for the second month in a row, though the rate of hiring slowed. Capital goods manufacturers reduced their staff during the month.
Business confidence declined from September and stayed below the long-run average. Approximately 18 per cent of manufacturers expect output to grow over the next year, driven by enquiries and demand for technology solutions.