India’s Manufacturing Sector Reaches New Heights with 57.5 PMI in October

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In the month of October, India’s manufacturing sector witnessed a turnaround after months of slowdown. As per the HSBC Purchasing Manager’s Index (PMI) for the manufacturing sector for the month of October has been recorded at 57.5 which shows a significant rise from the eight-month low of 56.5 recorded in September 2024. So, what does the uptick in PMI mean? How it can affect the investors? Let’s find out. 

What does PMI signify?

The Purchasing Manager’s Index or PMI indicates towards the order book and demand of different companies. If the index score is above 50 then it signifies that the company, industry, and the sector as a whole are expanding, with new demand and orders. A score below 50 indicates that the sector or the business is having a slowdown or contraction phase. 

While the PMI score was above 50 in the last few months as well, it was declining, and finally, in October, it went up the ladder and touched a new high, after dropping to an eight-month low of 56.5 in September. 

What made PMI rise in October?

As per S&P Global PMI increased in October due to growing demand from the consumers as the festivals were there and also due to job creation which has also gone up in the previous months. 

The detailed report suggests that the order book volumes have increased significantly and quickly for manufacturing companies in October which led to the rise in the PMI. The order book volume even surpassed the last 20-year average. The report suggests that the inclusion of new products and great marketing tactics inflicted the demand growth amongst consumers in a festive-led market. 

Another factor that contributed to the growing PMI in October was the rise in export orders. After an 18-month weakest increase in export orders in September, new contracts came in October from almost every corner of the world. It includes orders from the United States, as well as from Europe, Latin America, and Asia. 

This growing demand both globally and domestically boosted the production volumes in October, especially in the investment goods and consumer goods categories. Most of the companies in the manufacturing space witnessed robust growth in demand, with multiple orders in the pipeline and great market conditions. 

Wrapping up 

October is the month of the biggest Indian festivals like Navratri, Durga Puja, and Diwali, a surge in demand was expected but in India’s manufacturing sector especially in the consumer and investment goods segment, the growth surpassed previous months’ slowdown and touched new highs. This indicates a rebound in the market however, given the geopolitical situation, it will be crucial to keep a continuous check on the markets before making any investments.

Source: CNBC TV18

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