India’s manufacturing activity gained momentum in October as domestic demand strengthened, offsetting a slowdown in export growth, although business optimism slipped from a seven-month high, a business survey showed on Monday.
The HSBC India Manufacturing Purchasing Managers’ Index, compiled by S&P Global, rose to 59.2 in October from 57.7 in September, higher than a preliminary estimate of 58.4. The 50.0 mark separates expansion from contraction on a monthly basis. Output growth accelerated to match the joint-strongest pace in five years, equal to that seen in August. Manufacturers cited demand strength, efficiency improvements, new clients and technology investments as factors driving higher production.
But international sales growth weakened. New export orders increased at their slowest rate in 10 months, though the rise remained substantial.
Despite input cost inflation easing to an eight-month low, output charge inflation remained at its highest level in nearly 12 years for the second consecutive month. Companies reported passing on higher freight and labour costs to customers, while strong demand allowed them to maintain elevated prices.
