India’s manufacturing sector saw a strong rebound in October after a three-month slowdown, driven by a significant rise in demand. This improvement is helping create jobs and enhancing the overall business outlook, according to a business survey released on Monday.
Pranjul Bhandari, chief India economist at HSBC, highlighted that the manufacturing Purchasing Managers’ Index (PMI) improved noticeably in October as the economy’s conditions continued to get better. He noted that new orders and international sales are rising, indicating strong demand for Indian-made products.
Both the output and new orders sub-indexes reached three-month highs, showing a clear increase in demand. International orders also picked up from a year-and-a-half low in September, with requests for Indian goods coming from Asia, Europe, Latin America, and the U.S.
This strong demand has led to a positive outlook for the future. Bhandari added that business confidence remains high, fueled by expectations of ongoing consumer demand, new product launches, and pending sales approvals. To meet this growing demand, companies increased their hiring for the eighth consecutive month.
However, inflation in India rose to a nine-month high of 5.49% in September, mainly due to rising food prices, approaching the upper limit of the Reserve Bank of India’s target range of 2-6%. Despite this, a recent Reuters poll indicated that most economists still expect the RBI to lower interest rates in December from 6.50% to 6.25%.
