India's manufacturing sector rebounds in September
What's the story
India's manufacturing sector witnessed a growth spurt in September, ending a three-month-long slowdown. The surge was mainly fueled by strong demand, leading to the highest factory activity growth in seven months. The HSBC India Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, jumped to 55.1 last month from August's five-year low of 52.8.
Demand boost
New orders rise at fastest pace since February
The PMI reading indicates a growth in activity, with new orders rising at the fastest pace since February.
This is due to an increase in demand for electronic, food, pharmaceutical, and textile products.
Export orders also saw a spike as manufacturers reported higher demand from clients in Brazil, Europe, the UAE, and the US.
Recovery signs
Production rate and employment see major boost
The production rate also witnessed a major boost, reaching its highest since May. This was largely due to new business orders and high demand.
The rising demand also led to a revival in hiring, with employment growing at its fastest rate since May.
This comes after an outright decline in August, the first drop in factory jobs in two-and-a-half years.
Market outlook
Business confidence hits 4-month high
Business confidence hit a four-month high in September, buoyed by new inquiries and expectations of sustained demand.
However, cost pressures also increased, with input cost inflation rising faster than August due to higher prices for electronic components, pharmaceutical items, and steel.