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Indian manufacturing activity surged in the month of October, on the back of expansions in factory orders and quantities of purchases, while production growth outpaced its long-run average despite softening to a four-month low. At the same time, cost burdens rose at a broadly similar rate to September's 23-month low, while selling charge inflation moderated to the weakest since February.

According to the report, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) increased to 55.3 in October from 55.1 in September, above its long-run average (53.7) and indicating a stronger improvement in the health of the sector. The upward movement in the headline figure largely reflected stronger increases in employment and stocks of purchases.

The report further noted that firms were again able to secure additional work in October, taking the current sequence of growth to 16 months. Overall, factory orders increased at an above-trend pace that was nonetheless the weakest since June. New export orders also rose markedly, with the pace of expansion ticking higher. Indian manufacturing companies bought additional inputs in October amid efforts to rebuild stocks and fulfil greater sales. Overall, input buying rose solidly, but at the slowest pace in 14 months.

Meanwhile, Indian manufacturers remained confident of a rise in production volumes by October 2023. Predictions of better sales and marketing efforts were among the reasons cited for upbeat projections. The overall level of sentiment fell to a three-month low, though remained elevated by historical standards.