New Delhi: Indian manufacturing activity expanded at its fastest pace in almost two years in October, boosted by a surge in output and new orders, a survey showed on Tuesday. There was also a sharp rise in input costs and some pass on to end-consumers.
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, indicative of a robust improvement in manufacturing business conditions in the country.
“Once again, consumer goods producers outperformed their intermediate and investment goods counterparts, registering stronger rates of expansion for both output and new orders,” the survey said.
In October, output increased for the tenth straight month. An output sub-index, which measures overall production, was at 57.2 in October up sharply from 53.3 in September. Respondents attributed the latest rise in production to strong growth of new orders.
“The amount of new work received by manufacturers grew markedly during October, with anecdotal evidence linking the latest rise to improved underlying demand. Data indicated that although foreign orders contributed to the upturn in total new work, the rate of growth in new business from abroad eased to a three-month low,” said the survey.
“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.
She said extended monetary easing cycle, however, brought upside risks to inflation, with manufacturers seeing purchase costs rising at the quickest pace in over two years.
