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HSBC flash India composite PMI rises to 58.6 in Oct; job creation improves

Index has been above the 50-level separating growth from contraction for 39 consecutive months

PMI, PMI INDIA

The September figure, previously estimated at 59.3, was revised downwards to 58.3. (Photo: Shutterstock)

Shiva Rajora Delhi

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India's private sector economy picked up slightly in October after softening last month as manufacturing reported stronger demand, according to a survey that also showed job creation rose at the fastest pace since February 2006.
 
HSBC's flash India Composite Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 58.6 this month from September's final reading of 58.3, which was a 10-month low.
 
The index, which measures monthly change in the combined output of India's manufacturing and service sectors, has been above the 50-level separating growth from contraction for 39 consecutive months.
 
"Manufacturers outperformed service providers in terms of expansion rates for output and sales, and also recorded faster increases in input costs and selling prices," said the survey.
 
 
Flash PMI indicated that manufacturing regained “growth momentum” in October as several components accelerated after a modest slowdown over the past two to three months, said Pranjul Bhandari, chief India economist at HSBC.
 
"New orders and new export orders expanded at faster rates, providing a positive outlook for industrial production in the remaining months of 2024. However, manufacturers’ profit margins remain under pressure as input price inflation continued to rise. Manufacturers are attempting to pass on higher costs to consumers by raising output prices," she said.
 
Hiring was more pronounced in the service economy where the latest increase in employment was the sharpest in 18-and-half years, according to the survey. "Nevertheless, jobs continued to rise at a notable pace in the manufacturing industry, supporting the best upturn in payroll numbers at the composite level since February 2006. Anecdotal evidence suggested that part- and full-time workers were being hired, with both permanent and temporary contracts offered," the survey noted.
 
Input cost inflation at the composite level picked up to its strongest in three months, amid marginally quicker increases at both goods producers and service providers. "Survey participants reported rising prices for chemicals, eggs, meat, packaging, steel, and vegetables. However, the overall rate of cost inflation remained below the survey average."
 
Flash PMI records 75 per cent to 85 per cent of the total 800 responses from services and manufacturing firms each month.
 
The final manufacturing PMI figure for October will be released on November 4 and is projected to remain at 57.4. The services and composite PMI figures will be released on November 6.

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First Published: Oct 24 2024 | 11:12 AM IST

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