A moderate slowdown in new work intake and shop-floor output cooled the pace of India's manufacturing expansion in October. Mild input cost pressures helped contain the broader impact of this moderation. Fresh survey findings show that the manufacturing Purchasing Managers' Index (PMI) edged down to 54.7 in October from 55.1 in September. Despite the slight downtick, the figure remained comfortably above the neutral 50 threshold, confirming that production activity continues to grow at a healthy clip.
Under standard macroeconomic benchmarks, a PMI reading above 50 indicates operational expansion, whereas anything below marks an outright contraction. Sustained demand across sectors supported further additions to factory order books. The ongoing pace of growth retreated only slightly from the seven-month peak registered in September and stayed robust by historical comparisons. While production gains and incoming domestic orders softened somewhat, industrial producers continued to scale output and build inventory throughout October.
Robust Export Demand Offsets Domestic Moderation
In contrast to the slight domestic cooling, orders from overseas buyers surged significantly. Strong global appetite pushed new export order growth to a six-month high, providing solid underpinning for broader factory output. To safeguard against unpredictable supply disruptions in a volatile global setting and meet ongoing production needs, industrial managers expanded raw material stockpiles at the steepest rate in eight months.
Producers documented substantial gains in export business from multiple international markets, including the United States, the United Kingdom, the United Arab Emirates, Saudi Arabia, Canada, Bangladesh, Indonesia, Nepal, Oman, and Sri Lanka. Companies deliberately built precautionary reserves to ensure production continuity without bottlenecks.
Staffing Trends and Business Sentiment
Growing operating commitments prompted factory managers to expand workforce numbers for the second straight month, though recruitment proceeded at a more cautious pace. Pranjul Bhandari, Chief India Economist at HSBC, said, "India's manufacturing PMI fell from 55.1 last month to 54.7 in October, but it remains comfortably in expansion territory and above its long-term average."
Even with ongoing order inflows, overall business sentiment dipped compared to September, settling below its historical long-term average. Around 18 percent of surveyed manufacturers projected production volumes to increase over the coming year, while the remaining participants held a neutral outlook. S&P Global compiles the monthly survey data by tracking sales and procurement metrics across approximately 400 manufacturing enterprises.
