India's factory growth climbs to 7-month high on surging demand, PMI shows

Business Recorder reported that India's manufacturing sector expanded sharply in September, ending a three-month slowdown. The HSBC India Manufacturing PMI, compiled by S&P Global, climbed to 55.1 from August's five-year low of 52.8. That figure fell short of a preliminary estimate of 55.7 but was the highest since February.

New orders grew at their quickest rate since February, lifted by demand for electronics, food, pharmaceuticals and textiles. Exports also picked up, with manufacturers citing buyers in Brazil, Europe, the UAE and the United States. Output rose at its fastest pace since May, as firms bought more materials and built stockpiles ahead of expected sales. HSBC's chief India economist Pranjul Bhandari said finished-goods inventories rose by their second-largest margin in nearly 12 years.

Hiring resumed as employment grew at its fastest rate since May, reversing August's dip, the first fall in factory employment in 2.5 years. Business confidence climbed to a four-month high on fresh enquiries and hopes for sustained demand. Input costs rose faster than in August, led by electronic components, pharmaceutical items and steel, though selling prices increased only modestly. Inflation has stayed above the RBI's 4% target for a third straight month, and the RBI is expected to lift rates by 50 basis points to 5.75% this year.