New Delhi, Oct 1 (IANS): India’s manufacturing sector growth picked up in September with stronger new orders and output helping the sector’s Purchasing Managers’ Index (PMI) rise to a seven-month high of 55.1, according to data released by HSBC India on Thursday.
The seasonally adjusted HSBC India Manufacturing PMI rose to 55.1 in September from 52.8 in August.
The latest data indicated the strongest improvement in the health of the manufacturing sector in seven months.
However, the average PMI for the second fiscal quarter stood at 53.8.
Firmer demand for electronic, food, pharmaceutical and textile products supported a sharper rise in new orders, while total sales increased at the fastest pace since February.
“India’s factory sector ended the quarter on a firmer footing. The PMI rose to 55.1 in September, up from 52.8 as stronger domestic and overseas demand lifted sales and production,” Pranjul Bhandari, Chief India Economist at HSBC, said.
“Hiring resumed at its fastest pace since May, and manufacturers became more optimistic about the months ahead,” she said.
Moreover, new export orders also grew at a faster pace with firms reporting stronger demand from Brazil, Europe, the UAE and the US, according to the HSBC PMI data.
The improvement in demand helped factory output expand at the fastest pace in four months.
Intermediate goods also recorded the strongest growth in new orders and output, while capital goods saw only modest increases.
In addition, employment growth resumed in September. The pace of job creation was the strongest since May.
According to the PMI data, manufacturers also increased their purchases of materials and built up inventories.
Stocks of purchases rose at the fastest pace in seven months and were well above the long-run average.
Business confidence strengthened in the month with overall optimism about future output rising to a four-month high.
On prices, manufacturers reported faster increases in input costs in September, mainly due to higher prices of electronic components, pharmaceutical items and steel.
