India's manufacturing sector expanded at its fastest pace in seven months in September, driven by robust demand and increased hiring. The HSBC India Manufacturing PMI rose to 55.1, up from 52.8 in August, signaling a strong rebound in factory activity.
The strong rebound in India's manufacturing sector indicates robust economic activity and demand, potentially influencing future monetary policy decisions by the Reserve Bank of India. Meanwhile, the slight contraction in Russia's manufacturing sector highlights ongoing economic challenges.
India's manufacturing sector experienced a significant expansion in September, achieving its strongest growth in seven months, according to a private survey. The HSBC India Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, climbed to 55.1 from 52.8 in August, though it fell short of the preliminary estimate of 55.7. This reading marks the highest level since February.
The surge in activity was propelled by robust demand, with new orders rising at the fastest pace since February. Demand for electronic, food, pharmaceutical, and textile products was particularly strong, and export orders also accelerated, with increased demand noted from clients in Brazil, Europe, the UAE, and the US.
Output expanded sharply, reaching its strongest rate of growth since May, supported by new business and high demand. Companies increased their purchases of materials and built up stocks in anticipation of sales, leading to the second-largest increase in finished-goods inventories in nearly 12 years.
The rise in demand also spurred a recovery in hiring, with employment expanding at its strongest rate since May, following an outright decline in August. Business confidence improved to a four-month high, buoyed by new enquiries and expectations of sustained demand.
However, cost pressures increased, with input cost inflation rising faster than in August due to higher prices for electronic components, pharmaceutical items, and steel. Despite this, the rate of inflation remained below its long-run average. Selling prices also saw a modest increase, similarly below trend.
Separately, Russia's manufacturing sector contracted slightly in September, with the S&P Global Russia Manufacturing Purchasing Managers' Index (PMI) rising to 49.8 from 48.8 in August. Output and new orders declined for a second consecutive month, while employment fell for the tenth month in a row at the fastest pace since May. Cost pressures eased to a three-month low, and output price inflation slowed to its weakest since June.
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