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India’s manufacturing sector growth accelerated in October, supported by robust domestic demand, GST 2.0 reforms, productivity gains, and higher technology investments, according to a report released on Monday.

 

The HSBC India Manufacturing Purchasing Managers’ Index (PMI) climbed to 59.2 in October from 57.7 in September, data compiled by US-based financial intelligence provider S&P Global showed.

 

The uptick was attributed to faster growth in new orders and factory output at the start of the third financial quarter, driven by increased advertising and the recent implementation of GST reforms, the report said.

 

The expansion rate matched levels last seen in August, which was among the strongest in the past five years. A PMI reading above 50 indicates expansion in economic activity, while a reading below 50 points to contraction. A score of 50 signifies no change in activity.

 

Pranjul Bhandari, chief India economist at HSBC, said the manufacturing PMI acceleration reflected strong end-demand, which led to expansions in output, new orders, and job creation.

 

Input prices moderated in October, while average selling prices rose as some producers passed on additional costs to end-consumers, Bhandari noted.

 

Also Read : Private sector activity eases to 5-month low, shows PMI

 

Despite input cost inflation softening to an eight-month low, output charge inflation stayed at its highest level in 12 years for the second consecutive month.

 

Manufacturers reported transferring higher freight and labour expenses to customers, with strong demand enabling them to sustain elevated pricing.

 

Domestic sales growth continued to outperform export orders, which rose at a slower pace despite some recovery in overseas demand.

 

Employment generation extended for the twentieth consecutive month in October, with hiring remaining steady and broadly in line with September’s levels, the report said.

 

Manufacturers remained optimistic about the future business environment, crediting their confidence to GST reforms, capacity expansion, and strengthened marketing initiatives, according to the report.