New Delhi: Easing Covid-19 restrictions and healthy market conditions on the back of higher demand accelerated India’s manufacturing sector growth in October.
The period under consideration also coincides with the start of the festive season in India which traditionally sees a higher off-take.
In response to strong sales gains and softer containment measures related to the Covid-19 disease, firms lifted production at the strongest pace recorded since late 2007.
Consequently, the headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) pointed to the strongest improvement in the health of the sector in over a decade.
The growth was led by the intermediate goods category, but there were also robust expansions in the consumer and investment goods sub-sectors, cited the Manufacturing PMI report.
Resultantly, the reading on the index showed a rise from 56.8 in September to 58.9 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.
However, there was a disappointing news on the employment front though, with October seeing another reduction in payroll numbers.
The compliance of government guidelines related to the Covid-19 pandemic caused a further reduction in employment.
The fall was the seventh in consecutive months, albeit the weakest in this sequence
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.”