India’s manufacturing activities continued to gain momentum, settling in the expansion territory for a third consecutive month according to the monthly IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) survey released on Monday, November 1.
Manufacturing PMI stood at 55.9 in October, increasing from 53.7 in September and 52.3 in August after dipping below the critical 50.0 mark in July. The reason for increasing manufacturing activity has been attributed to the easing lockdown restrictions due to the receding effects of the pandemic that have propelled the economy on a path to recovery. The increasing demand owing to easing COVID-19 restrictions resulted in boosted sales.
The Indian manufacturing sector witnessed the fastest growth of new orders in October in the last 7 months. Likewise, factory output kept pace, recording the strongest increase since March 2021. October saw strong growth in all three broad categories of manufacturing. However, the sharpest increase was recorded in the production of intermediate goods. Contrarily, the production of consumer goods was the highest in comparison in September.
The Manufacturing PMI has remained volatile throughout the year as the instability in the growth momentum of the manufacturing sector impacted total factory output. However, the PMI recorded in October forecasts strengthening of output, new orders, exports, the quantity of purchases, and input stock for the remainder of the fiscal year.
Pollyanna De Lima, Economics Associate Director at IHS Markit predicted that manufacturing activity in India will continue to increase throughout the third quarter of the fiscal year 2021-2022 if the pandemic conditions remain stable.
“Upbeat business confidence and projects in the pipeline should also support production in the coming months,” she added. If the pandemic continues to shrink, the IHS Markit expects a 9.7 per cent annual increase in factory output for the calendar year 2021.
