India's manufacturing growth slows as PMI falls to 54.7
What's the story
India's manufacturing sector witnessed a slowdown in October, with the HSBC India Manufacturing Purchasing Managers's Index (PMI) dipping to 54.7 from September's 55.1. The decline was mainly attributed to a deceleration in factory output and new orders. However, despite the moderation, the index remained above the crucial 50-point mark that separates expansion from contraction and continued to exceed its long-run average.
Global impact
Export orders rise at fastest pace in 6 months
The slowdown in manufacturing activity was offset by a surge in international demand, with new export orders rising at their fastest pace in six months.
Orders from the US, UK, UAE, Saudi Arabia, Bangladesh, Canada, and Indonesia increased significantly.
Companies attributed this growth to favorable demand conditions, new client acquisitions, and successful marketing campaigns.
Cost control
Input cost inflation falls to lowest level since February
In a major development, inflationary pressures across the manufacturing sector eased in October.
Input cost inflation fell to its lowest since February, even as manufacturers reported higher prices for certain raw materials and energy.
The rate of increase in selling prices also slowed down to its weakest pace in nearly four years, indicating that manufacturers were passing on relatively limited cost increases to customers.
Workforce dynamics
Manufacturers less optimistic about business conditions
Manufacturers continued to hire workers for the second consecutive month, driven by higher production requirements and rising workloads.
Outstanding business volumes rose for the seventh consecutive month, although the backlog of unfinished work was marginal.
Despite sustained growth in orders and production, manufacturers were less optimistic about business conditions compared to September, with only 18% expecting output to increase over the next 12 months.