In October, India’s business activity experienced a slight improvement, with the manufacturing sector showing better performance compared to services, as per a recent private survey. The HSBC Flash India Composite Purchasing Managers’ Index, compiled by S&P Global, rose to 58.6 in October from the previous month’s final figure of 58.3, which was the lowest in 10 months. The index has now remained above the 50 mark for 39 consecutive months.
The current figure is slightly lower than the January figure of 61.2. On average, the index stood at 60.5 during the first 10 months of this year, up from 59.9 in the same period last year.
The manufacturing sector showed growth momentum in October, with improvements across various components after a slight slowdown in the past few months. Pranjul Bhandari, HSBC’s chief India economist, mentioned that new orders and exports grew at a faster pace, indicating a positive outlook for industrial production in the coming months.
The survey highlighted a notable increase in new orders driven by strong demand and increased international interest in Indian products and services. This growth also led to a surge in employment, reaching its highest rate in nearly two decades, particularly in the services sector.
Input cost inflation at the composite level reached a three-month high, with rises seen in various sectors like chemicals, meat, packaging, steel, and vegetables. Despite the challenges in input prices, manufacturers are striving to maintain their profit margins by increasing output prices.
The survey also mentioned a mixed outlook at the sub-sector level, with manufacturing sentiment hitting a high since July while dipping for service companies. Overall, private sector sentiment remained above its long-term average.
