Oct manufacturing growth hits 2-yr high
NEWDELHI: Manufacturing sector growth in India hit a 22-month high in October, boosted by a surge in output and new orders, but it came alongside a sharp rise in input costs and some pass on to end-consumers, a survey showed on Tuesday.
The Nikkei Markit India Manufacturing Purchasing Managers’ Index (PMI) — a gauge of manufacturing performance — rose to 54.4 in October from 52.1 in September, indicating a robust improvement in manufacturing business conditions. A reading above 50 indicates expansion.
“The sector looks to be building on the foundation of the implied pick-up in growth in the previous quarter,” said Pollyanna De Lima, economist at IHS Markit and author of the report. The extended easing cycle of the Reserve Bank of India (RBI), however, resulted in upside risks to inflation, he added.
On prices, the survey said that part of the increase in cost burdens was passed on to consumers by way of higher selling prices, which is likely to continue.
Consumer inflation cooled to a 13-month low in September due to moderating food prices, but a pick-up will likely affect prospects of further easing from the central bank.
The amount of new work received by manufacturers grew markedly during October and the rate of expansion hit a 22-month high, largely driven by improved underlying demand.
“The domestic market was the prime source of new business gains, but let’s not forget that there is also a robust export component in these positive numbers,” Lima said.
PTI & REUTERS