India Manufacturing PMI Rises To 55.1 In September, Highest In Seven Months

New Delhi, Oct 6 (KNN) India's manufacturing sector recorded a stronger recovery in growth momentum in September, with faster increases in new orders and output supporting hiring and inventory buildup, according to the HSBC India Manufacturing PMI.

The seasonally adjusted PMI rose to 55.1 in September from 52.8 in August, marking the strongest improvement in manufacturing conditions in seven months. However, the average PMI for the second fiscal quarter fell to 53.8, its lowest since the same quarter in 2021.

Stronger demand for electronic, food, pharmaceutical and textile products drove a sharper rise in new orders, while total sales expanded at the fastest pace since February. New export orders also increased, supported by demand from Brazil, Europe, the UAE and the US.

The improvement in demand led to the fastest expansion in factory output in four months. Intermediate goods recorded the strongest growth in both new orders and output, while capital goods posted only modest gains.

Hiring And Inventory Build-Up Increase

Employment growth resumed in September, expanding at its fastest pace since May. Firms also increased purchases of materials and built up inventories in anticipation of stronger sales.

Finished-goods inventories rose for the third consecutive month and recorded their second-fastest increase in nearly 11-and-a-half years, according to the survey.

Pranjul Bhandari, Chief India Economist at HSBC, said the manufacturing sector ended the quarter on a stronger footing, with domestic and overseas demand supporting sales and production.

Business confidence also strengthened to a four-month high, with manufacturers citing new enquiries and expectations of favourable demand conditions.

Input And Selling Price Inflation Picks Up

Manufacturers reported faster increases in input costs in September, driven by higher prices for electronic components, pharmaceutical products and steel. However, input-cost inflation remained below its long-run average.

Selling prices also increased at a faster pace, although inflation remained modest and below the historical trend.

Cost pressures were strongest among intermediate goods producers, while capital goods manufacturers reported the weakest increase. Consumer goods companies recorded the sharpest rise in selling prices.

(KNN Bureau)