BENGALURU, Oct 24 - India's business activity experienced a slight uptick in October, driven by increased demand in the manufacturing sector, according to a recent survey. The HSBC flash India Composite Purchasing Managers' Index rose to 58.6 from September's 58.3, marking a 10-month low.
This index has remained above the 50-level, which indicates growth, for 39 consecutive months, the longest expansionary period since June 2013. The manufacturing sector showed renewed growth momentum, with new orders and export orders expanding at accelerated rates.
The manufacturing index increased to 57.4 from 56.5, while the services sector's index rose slightly to 57.9 from 57.7. Goods production growth reached a two-month high, reflecting a positive outlook for the sector.
Prime Minister Narendra Modi's government has been actively promoting goods production, attracting over $17 billion in investments since the launch of the production-linked incentive scheme. This has led to production valued at approximately 11 trillion Indian rupees ($131 billion) and the creation of nearly a million jobs.
The survey also indicated a rise in international demand, resulting in a faster increase in overall exports. Consequently, companies ramped up hiring, with employment generation reaching its highest level in about eighteen-and-a-half years. Job creation in the services sector outpaced that in manufacturing.
Despite robust demand, manufacturers faced pressure on profit margins due to rising input costs. Prices charged by companies increased at the fastest rate in three months, with notable hikes in costs for chemicals, meat, and packaging materials.
The business outlook for the upcoming year varied, with manufacturers displaying optimism not seen since July, while sentiment among services companies showed a slight decline.