India’s Manufacturing Sector Grows Strong in October 2024
In October, India’s manufacturing sector showed significant growth, as indicated by the HSBC India Manufacturing Purchasing Managers’ Index (PMI), which rose from 56.5 in September to 57.5. This marks the strongest performance since early 2024, driven by increased domestic and international demand.
Key Drivers of Growth
The growth was fueled by new orders and increased production, with demand rising from markets in Asia, Europe, Latin America, and the U.S. Businesses attributed this to new products and successful marketing campaigns, leading to a surge in consumer and investment goods production.
Impact on Employment and Prices
To meet the demand, companies increased their purchases of raw materials and reported smooth supplier cooperation. Nearly one in ten manufacturing firms added new jobs. However, input price inflation reached a three-month high due to rising costs of raw materials, labor, and transportation.
Economic Insights
Pranjul Bhandari, Chief India Economist at HSBC, noted the substantial increase in India’s manufacturing PMI, reflecting improved economic conditions and strong demand growth. Despite inflationary pressures, business confidence remains high, with expectations of continued strong consumer demand and new product releases.
In response to rising costs, companies have increased their selling prices to offset the higher cost of doing business.
Doubts Revealed
Manufacturing Sector -: The manufacturing sector is a part of the economy that makes products using raw materials and machinery. In India, this includes making things like clothes, cars, and electronics.
HSBC India Manufacturing PMI -: HSBC India Manufacturing PMI is a number that shows how well the manufacturing sector is doing. A number above 50 means the sector is growing, and a number below 50 means it is shrinking.
Domestic and International Demand -: Domestic demand means people in India want to buy more products. International demand means people in other countries want to buy products made in India.
Input Price Inflation -: Input price inflation means the cost of things needed to make products, like raw materials and labor, is going up. This can make it more expensive to produce goods.
Business Confidence -: Business confidence is how positive companies feel about the future. If confidence is high, businesses believe they will do well and continue to grow.
