Manufacturing activity increases in October thanks to robust order flow

The manufacturing PMI remained for the 15th consecutive year above the 50-point mark. In terms of PMI, a footprint greater than 50 means expansion, while a lower score indicates a contraction.

As new orders grew at a rapid pace and firms hired more, the country's manufacturing sector saw an improvement in October.

The Purchasing Managers Index for the Nikkei India manufacturing sector rose from 52.2 in September to 53.1 in October, as new orders and production rose at the fastest rate in four months.

This is the 15th consecutive month for which the manufacturing PMI has remained above the 50-point mark. In terms of PMI, a footprint greater than 50 means expansion, while a lower score indicates a contraction.

New orders rose at a brisk pace in October, and panelists attributed the increase to successful advertising efforts, strengthening underlying demand, and setting competitive prices. The increase in new order flows is the fastest since June.

"A combination of domestic and foreign orders fueled the recovery in overall activity, although export orders posted the smallest expansion since July, the total number of new jobs advanced at the height of the year, "said Pollyanna De Lima, Senior Economist at IHS Markit and author of the report.

In October, manufacturers stepped up their hiring to meet growing demand; and job creation during the month was the strongest since last December.

Although Indian manufacturers are hopeful that production will be higher over the next year and that they have increased their marketing activities and investments in research and development, the level

"The Producers of goods face challenges and uncertainties, which have resulted in the lowest degree of optimism observed for 20 months, "Lima said.

On the price front, upward inflationary pressures were observed as high prices for chemicals, energy and metals were raised, average costs increased and some manufacturers pbaded on some of the additional costs to their customers by increasing their charges.

Price inflation was moderate, in the context of historical survey data, the survey noted. – With PTI

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