Manufacturing growth revives in October with 22 month high PMI

NEW DELHI: India's manufacturing growth revived in October supported by new orders, output and stocks of purchases indicating a "robust improvement" in manufacturing business conditions, a private survey showed on Tuesday.

At its 22 month high, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers Index was 54.4 compared with 52.1 in September.

A reading above 50 on the index denotes expansion.

"October data provide positive news for India’s economy...The sector looks to be building on the foundation of the implied pick-up in growth in the previous quarter," said Pollyanna De Lima, Economist at Markit and author of the report and attributed the expansion to the 25 basis point cut in interest rates by RBI monetary policy committee.

The survey showed that consumer goods producers outperformed their intermediate and investment goods counterparts, registering stronger rates of expansion for both output and new orders.

Input costs rise at fastest rate since August 2014 part of which was passed on to consumers by way of higher selling prices and is likely to continue on an upward trend as we head towards the year end, according to De Lima.