India’s business activities have increased in October. Preliminary data released on October 24 showed that India’s business activity accelerated in October. HSBC Flash TKS Industriesposite Output Index has increased to 58.6 from 58.3 last month. Let us tell you that the Composite Output Index was at its lowest level in 10 months last month. According to the data received today, October Manufacturing PMI has increased from 56.5 in September to 57.4. At the same time, Services PMI has increased from 57.7 in September to 57.9 in October.
Let us tell you that the level of 50 acts as the dividing line between expansion and contraction in manufacturing activity. That is, a reading of Manufacturing PMI above 50 indicates expansion in manufacturing sector activity. While a reading below 50 indicates a contraction in manufacturing activity.
High frequency data has indicated a slowdown in the second quarter. Manufacturing and services activity has declined during this period. However, the central bank and international organizations have maintained India’s growth forecast for this year.
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The Reserve Bank of India has maintained the growth target for FY 25 at 7.2 percent in its October policy. The International Monetary Fund has also maintained its forecast of 7 percent. According to RBI, economic activity is likely to accelerate in the last two quarters of the current financial year, in which the average growth rate will be 7.4 percent.
The headline index has been above the 50-level separating expansion and contraction for 39 consecutive months. This is the longest period of growth since June 2013.
HSBC Chief India Economist Pranjul Bhandari said, “India’s flash manufacturing PMI indicated that the manufacturing industry has regained growth momentum in October. After a slight slowdown in the last two to three months, many segments picked up.” New orders and new export orders have increased sharply, which is a good sign for industrial production for the remaining months of 2024.”