Growth in India’s manufacturing activity touched a 22-month high in October, with a stronger rise in new orders and output, showed the widely tracked Nikkei India Manufacturing Purchasing Managers’ Index (PMI).
Even so, companies did not generate additional employment. Meanwhile, inflationary pressures picked up on the more accommodative stance of the Reserve Bank of India (RBI) and companies passed on higher prices. RBI’s stance boosted manufacturing growth. The PMI rose to 54.4 in October, after falling to 52.1 in September from 52.6 in August. The 50-point mark separates expansion from contraction. Data on the Index of Industrial Production (IIP) showed manufacturing output declined for July and August. The eight-industry core sector index, comprising almost 38 per cent of the IIP, rose to a three-month high of five per cent in September, giving broad indications that manufacturing might increase in September and could be sustained in October because of festival season demand.