India's Manufacturing Surges to 7-Month High on Strong Demand

India's factory sector concluded the third quarter on a strong note, as evidenced by the manufacturing Purchasing Managers' Index (PMI) rising to 55.1 in September. This marks a significant increase from August's 52.8 and represents the highest level in seven months.

The expansion was primarily fueled by surging domestic and overseas demand, which translated into heightened sales and production. Hiring also resumed at its most vigorous pace since May, indicating growing confidence in the sector.

Manufacturers experienced a faster rise in input costs and selling prices, though overall inflation remained mild historically. Firms expanded their procurement of materials and increased inventories to meet anticipated sales, with finished goods inventories seeing their second-largest increase in nearly 12 years.

Demand from clients in Brazil, Europe, the UAE, and the US contributed to a faster expansion of export orders. Overall positive sentiment among manufacturers reached a four-month high, driven by expectations of sustained strong demand and a healthy inquiry pipeline.