Growth in manufacturing activities in India continued gathering momentum, remained in the expansion territory for the 4th straight month in October, a private survey showed on Monday.
The seasonally-adjusted IHS Markit Purchasing Managers’ Index came in at 55.9 in October, rising from 53.7 in September. Do note, a PMI number greater than 50 indicates expansion in business activity. A number less than 50 shows contraction.
Data shows that panelists continued to report rising prices for several materials & transportation. Selling charges had to be lifted again as overall input costs increased at the sharpest rate since February 2014. Pollyanna De Lima, Economics Associate Director at IHS Markit, said “Manufacturing activity will continue to expand throughout the third quarter of fiscal year 2021/22 should the pandemic remain under control.”
New orders also posted an increase in October. In fact, the spike in new orders was quite sharp, the survey shows, and expanded at the fastest rate in seven months. And as such, factory output too saw a sharp recovery & was the increased at the fastest pace since March. “Upbeat business confidence and projects in the pipeline should also support production in the coming months,” De Lima added.
Highlighting the inflation concerns, De Lima noted that the input cost inflation accelerated substantially in October, to a near eight-year high amid strong global demand for scarce raw materials. The overall rate of input cost inflation surged to a 92-month high. A vast majority of the manufacturers left their fees unchanged, which led to ‘moderate overall inflation’, the report shows.
“Despite the overall improvement in operating conditions, jobs failed to increase. This was often linked to sufficient capacity to deal with current workloads and government norms surrounding shift work,” De Lima added.