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Informist, Thursday, Oct. 24, 2024

 

--India Oct flash composite PMI output index 58.6 vs 58.3 Sept final 

--India Oct flash services PMI activity index 57.9 vs 57.7 Sept final 

--India Oct flash manufacturing PMI 57.4 vs 56.5 Sept final 

 

NEW DELHI – India's private sector activity picked up in October after slowing to a 10-month low the previous month, with both the services and manufacturing sectors expanding faster than in September. The HSBC Flash India Composite Purchasing Managers' Output Index, compiled by S&P Global, rose to 58.6 in October from the final print of 58.3 in September.

 

"India's flash manufacturing PMI indicated that the manufacturing industry regained growth momentum in October. Several components accelerated after a modest slowdown over the past two to three months," Pranjul Bhandari, chief India economist at HSBC, said in a release.

 

The flash manufacturing PMI index rose to 57.4 in October from last month's final print of 56.5, while the services PMI ticked up to 57.9 from 57.7 in September. A Purchasing Managers' Index reading above 50 denotes expansion in activity, while a print below 50 indicates contraction.

 

The expansion in private sector activity was led by the manufacturing sector, which saw a faster rise in output and sales as compared to services sector firms. Total new orders rose in October, thanks to an improvement in international demand for Indian goods and services, S&P Global said.

 

A steeper rise in new work intakes this month also pushed companies to increase business activity and recruit additional workers in October, S&P Global said. The latest increase in employment was the quickest in 18 and a half years.

 

"Nevertheless, jobs still rose at a marked pace in the manufacturing industry, supporting the best upturn in payroll numbers at the composite level since February 2006. Anecdotal evidence indicated that part- and full-time workers had been taken on, with both permanent and temporary contracts offered," S&P Global said in a release.

 

Input cost inflation rose to a three-month high in October, even as the overall rate of cost inflation was below the survey average, S&P Global said. According to firms surveyed by S&P Global, prices of chemicals, eggs, meat, packaging, steel, and vegetables all rose this month.

 

With demand conditions remaining favourable and cost pressures intensifying, firms increased their selling prices in October, S&P Global said. The rate of charge inflation was above its trend, and climbed to a three-month high. Notably, manufacturers posted the sharpest upturn in 11 years.

 

Business confidence among manufacturing firms was at its highest since July, while sentiment at services companies faded. For the overall private sector, the degree of optimism receded but remained above its long-run average.

 

The October PMI print presents a mixed picture for the Reserve Bank of India, with both growth and prices picking up from the previous month. The RBI's Monetary Policy Committee left the repo rate unchanged in October even as it changed the stance to neutral. 

 

RBI officials have maintained their cautious tone on inflation in the near term, while sounding optimistic about growth. Minutes of the October MPC meeting showed RBI Deputy Governor Michael Patra noting that while some high-frequency indicators slowed down in Jul-Sept, it was because of "idiosyncratic factors like unusually heavy rainfall" and "Pitrupaksha". "They should stabilise in the second half of the year as consumption receives a boost in the festival season," Patra said.  End

 

Reported by Shubham Rana

Edited by Avishek Dutta

 

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