Factory growth hits a seven-month high as India’s manufacturing PMI jumps to 55.1
New orders, exports and hiring all picked up in September, according to the HSBC survey. Input costs are rising faster, but price pressures remain mild by historical standards.
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India’s manufacturing sector grew at its fastest pace in seven months in September. The HSBC India Manufacturing Purchasing Managers’ Index (PMI) rose to 55.1 from 52.8 in August. A reading above 50 means activity is expanding.
India’s factory sector ended the quarter on a firmer footing. — Pranjul Bhandari, Chief India Economist, HSBC
What drove the jump
- Orders: New orders and output accelerated on strong demand at home and abroad. Sales growth was the highest since February.
- Exports: Firms reported more orders from Brazil, Europe, the UAE and the US.
- Jobs: Hiring resumed after a fall in August and grew at the fastest pace since May.
- Sectors: Demand was strong for electronics, food, pharmaceuticals and textiles.
- Confidence: Business optimism hit a four-month high.
The price question
Input costs and selling prices both rose faster in September, though the survey says inflation remained mild by historical standards. Companies also built up stocks of finished goods for the third month in a row, at the second-fastest pace in about 11 and a half years, a sign they expect sales to keep growing.
Why it matters this week
The data comes just before the RBI’s Monetary Policy Committee meets on 5-7 October. Strong factory activity and rising prices give the RBI more room to raise interest rates to fight inflation without worrying as much about hurting growth.
The survey is compiled by S&P Global from responses by about 400 manufacturers.
Sources: ThePrint.
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