India's manufacturing activity moderated slightly in October, with the HSBC India Manufacturing Purchasing Managers' Index (PMI) easing to 54.7 from 55.1 in September, according to the final data released by S&P Global on Monday, November 2. The reading was also below the flash estimate of 54.9 published on October 23.

Source: DevDiscourse (ANI, S&P Global data)

Despite the decline, the index remained comfortably above the neutral mark of 50.0, which separates expansion from contraction, and stayed above its long-term average, the report said. Growth in new business remained strong, with new export orders increasing at the fastest pace in six months.

Manufacturers reported higher demand from markets including Bangladesh, Canada, Indonesia, Nepal, Oman, Saudi Arabia, Sri Lanka, the United Kingdom, the United States and the UAE, attributed in the survey to favourable demand trends, new client wins and successful marketing campaigns. Stronger overseas demand supported a robust rise in factory output, although production growth softened from September.

Price pressures also eased during the month. Input cost inflation retreated to its lowest level since February, while the increase in selling prices was the weakest in just under four years, the survey said. Manufacturers reported higher prices for some materials and energy, but overall cost pressures moderated across all three broad manufacturing categories.

"Strong international demand pushed growth of new export orders to a six-month high, supporting a robust rise in output," said Pranjul Bhandari, Chief India Economist at HSBC, in the report. She added that manufacturers increased input inventories at the fastest pace in eight months, building precautionary buffers amid a volatile global environment, while finished goods inventories rose at an unprecedented pace.

Source: FX.co (HSBC PMI final, November 2 update)

Factory employment increased for the second consecutive month, although the pace of job creation remained slight. Business confidence slipped from September and remained below its long-run average, with around 18 per cent of manufacturers expecting output to increase over the coming year, supported by new client enquiries and demand for industrial automation and technology solutions.