Manufacturing activity in India continued to improve for the month of October, as sustained demand pushed activities higher.
According to IHS Markit India Manufacturing PMI companies raised output to the greatest extent in 13 years amid robust sales growth.
"While firms purchased additional inputs for use in the production process, payroll numbers were lowered due to government guidelines related to the coronavirus disease 2019 (COVID-19). Inflationary pressures, meanwhile, remained subdued as seen by a modest increase in input costs and only marginal rise in selling prices," a release from IHS Markit India Manufacturing showed.
In fact, manufacturing activity rose from 56.8 in September to 58.9 in October. The headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index pointed to the strongest improvement in the health of the sector in over a decade.
"Growth was led by the intermediate goods category, but there were also robust expansions in the consumer and investment goods sub-sectors. Manufacturers indicated that the ongoing relaxation of COVID-19 restrictions, better market conditions and improved demand helped them to secure new work in October. Moreover, the upturn in sales was the strongest since mid-2008. New export orders likewise rose at a quicker pace, one that was the most pronounced in close to six years," the release stated.
Commenting on the latest survey results, Pollyanna De Lima, Economics Associate Director at IHS Markit, said: "Levels of new orders and output at Indian manufacturers continued to recover from the COVID-19 induced contractions seen earlier in the year, with the PMI results for October highlighting historically-sharp monthly rates of expansion. "Companies were convinced that the resurgence in sales will be sustained in coming months, as indicated by a strong upturn in input buying amid restocking efforts. "Also, confidence towards the year-ahead outlook for production improved as firms hoped that fewer COVID-19 cases and the reopening of other businesses could boost output growth. "There was disappointing news on the employment front though, with October seeing another reduction in payroll numbers. Survey participants that noted job shedding mentioned having observed containment measures to halt the spread of the coronavirus disease 2019."