India’s Manufacturing Sector Sustains Strong Growth Momentum in October

Picture Credit: by Business Outreach

India’s manufacturing sector continued to demonstrate resilience and expansion in October, with the Manufacturing Purchasing Managers’ Index (PMI) rising to 59.2 from 57.7 in September, according to S&P Global. This robust performance underscores the sector’s ability to capitalize on favorable domestic conditions, including strong consumer demand, Goods and Services Tax (GST) relief measures, productivity improvements, and greater adoption of advanced technologies.

HSBC’s Chief India Economist, Ms. Pranjul Bhandari, noted that the acceleration reflected broad-based gains in output, new orders, and employment, all supported by resilient end-demand. Importantly, input prices eased during the month, offering manufacturers some relief, even as selling prices edged higher as firms passed on modest cost increases to consumers. The PMI reading, well above the neutral 50 threshold, signals sustained expansion across manufacturing activities.

Domestic demand was the primary driver of growth, with new orders surging significantly. In contrast, export growth moderated to its weakest level this year, highlighting the sector’s reliance on internal consumption. Strong buying activity lifted inventories, with input purchases rising at their fastest pace since May 2023, reflecting manufacturers’ confidence in future demand.

Picture Credit: by BizBracket

Inflationary pressures also showed signs of easing. Input cost inflation fell to an eight-month low, though output prices remained elevated, marking a twelve-year high consistent with September’s levels. Employment growth continued steadily for the twentieth consecutive month, reinforcing the sector’s stability and its role in job creation.

Looking ahead, manufacturers expressed optimism about the coming months. Key drivers of this positive outlook include ongoing GST reforms, planned capacity expansions, and expectations of sustained domestic demand. Together, these factors position India’s manufacturing sector to maintain its growth trajectory, reinforcing its critical role in the country’s broader economic development.