India factory growth hits seven-month high in September on strong demand

India's manufacturing sector activity reached a seven-month high in September, driven by higher new orders, increased output, and solid job growth in factories.

Growth Numbers

The seasonally-adjusted HSBC India Manufacturing Purchasing Managers' Index rose to 55.1 in September from 52.8 in August. In the PMI index, any score above 50 shows growth, while a score below 50 shows a slowdown. HSBC Chief India Economist Pranjul Bhandari said stronger domestic and overseas demand helped lift sales and production.

Sales And Exports

Strong demand across sectors like electronics, food, pharma, and textiles pushed total sales growth to its highest level since February. Export orders also grew faster, with new clients coming from Brazil, Europe, the UAE, and the U.S. Because of this, business optimism reached a four-month peak.

Hiring And Inventory

Job growth picked up in September after a slow period in August, marking the fastest pace of hiring since May. Companies bought more raw materials and built up stocks to get ready for future sales. Finished goods inventories saw their second-largest increase in nearly twelve years. Meanwhile, input costs and selling prices both went up faster, though inflation rates stayed mild compared to past history.

Context

The HSBC India Manufacturing PMI is put together by S&P Global by gathering answers from questionnaires sent to about 400 manufacturing companies. Purchasing Managers' Index surveys are widely watched business indicators because they give a quick monthly look at whether industrial production, hiring, and factory orders are expanding or shrinking.