The Indian manufacturing sector strengthened further in the month of October, on account of stronger order inflows and job creation. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - improved to 53.1 in October from 52.2 in September. This is the 15th consecutive month that the manufacturing PMI reading stood above the watershed 50 mark, which differentiates growth from contraction.
During the reported month, manufacturing firms responded to stronger order inflows by scaling up production, input purchasing and employment. New orders grew at fastest rate since June, on the back of successful advertising efforts, strengthening underlying demand and competitive price setting, while job creation was the strongest since last December. However, the upturn in export sales cooled at the start of the fourth quarter. The expansion was the weakest in three months and below the long-run series average.
On the price front, the manufacturing companies continued to face higher input costs during October, amid reports of higher prices for chemicals, energy and metals. Consecutively, the firms attempted to pass on their higher cost burdens on to their clients by hiking their charges. In the month, the rate of selling price inflation was mild in the context of historical survey data and much weaker than seen for costs. Meanwhile, Indian manufacturers were confident that output will be higher over the course of the next year, with sentiment underpinned by planned R&D investments and marketing initiatives.