India factory growth slows in October, export orders jump, PMI shows

India's manufacturing sector experienced a slowdown in October, as domestic demand weakened and hiring declined, according to a private survey conducted by HSBC. The HSBC's India Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, decreased to 54.7 from 55.1 in September, falling below the preliminary estimate of 54.9.

A PMI reading above 50.0 indicates growth in the sector. New orders showed a slight decline from the previous month's seven-month high, while export orders surged to their fastest pace in six months. However, output levels declined, with manufacturers stockpiling finished products at a record pace due to robust demand and preventive measures against potential shortages.

Factory employment grew for the second consecutive month, but the pace slowed compared to September, with capital goods manufacturers cutting staff. Business confidence slightly declined, though it remained broadly consistent with the levels observed over the past year and below its long-run average. Input cost inflation decreased to its lowest level since February, while selling price increases reached their weakest point in nearly four years, indicating limited pricing power for manufacturers.