India’s Manufacturing Picking up Pace after 3 Months of Decline

India’s manufacturing sector saw a notable rebound in October, with the HSBC India Manufacturing Purchasing Managers' Index (PMI) rising to 57.5 from September’s eight-month low of 56.5, indicating robust expansion. This improvement was fueled by strong growth in total new orders and exports, supported by successful product launches and marketing strategies.

Chief India Economist at HSBC, Pranjul Bhandari, highlighted that the uptick reflects increasing demand for Indian goods domestically and internationally. New export orders, which had slowed in September, showed renewed strength, with panelists reporting contract gains from Asia, Europe, Latin America, and the US.

The October data also revealed rising inflationary pressures, with input and output prices both increasing due to higher material, labor, and transportation costs. This has led to increased business expenses as manufacturers not only face higher production costs but also add staff to meet demand.

On the employment front, manufacturers hired more staff, with about 10% of surveyed companies increasing their workforce, while only 1% reduced staff. Looking forward, Indian manufacturers remain optimistic about future production growth as demand strengthens.