Manufacturing PMI up to 52.9% in October

Manufacturing growth as measured by the HSBC manufacturing purchasing managers' index (PMI) rose to 52.9 in October from 52.8 in September, according to a survey announced on Thursday.

"Economic activity in the manufacturing sector picked up slightly thanks to firm new orders," said HSBC economist Leif Eskesen. "Looking ahead, the recovery in manufacturing growth is likely to be slow."

Manufacturing growth rose in October from September's 10-month low, following a rebound in new orders and easing of price pressures, the survey noted. The index has remained above 50, which divides growth and contraction, for over three and a half years.

Input price inflation in the Indian goods-producing sector persisted in October and part of the burden of input cost inflation was passed on to clients as output prices were increased again. However, the rate of inflation was the slowest since November 2010, HSBC said.

HSBC said that inflation has eased notably with both output and input prices rising at a slower pace in October but it is likely to stay "elevated for a while". Inflation as measured by all indices has remained elevated and Wholesale Price Index-based inflation has remained above the Reserve Bank's comfort zone of 5 to 5.5% for past 34 months now.

The new orders sub-index, an indicator of future output, edged up to 54.9 last month from 54.4 in September while export orders grew for the second straight month at a slightly slower pace.

 Data released last month showed manufacturing rose 2.9 per cent in August from a year earlier after contracting 0.4 per cent in the previous month. Overall output at factories, mines and utilities rose an annual 2.7 per cent.

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