India’s business activity saw a slight uptick in October, driven by stronger demand in the manufacturing sector, with job creation reaching its highest level since February 2006, according to a recent survey.

HSBC’s flash India Composite PMI, compiled by S&P Global, rose to 58.6 in October from 58.3 in September, a 10-month low. The index has stayed above the 50-mark, indicating growth, for 39 straight months—its longest expansion since June 2013.

India’s flash manufacturing PMI showed that the manufacturing sector regained growth momentum in October after slowing down in the past two to three months, according to HSBC’s chief India economist, Pranjul Bhandari.

Faster expansion in new and export orders indicates strong industrial production for the rest of 2024.

Strong sales pushed the manufacturing index to 57.4 in October from 56.5 in September, while the services sector saw a slight rise to 57.9. Goods production growth hit a two-month high.

The manufacturing sector, which makes up less than one-fifth of India’s economy, benefits from the government’s efforts to boost production through the production-linked incentive scheme, attracting over $17 billion in investment and creating nearly a million jobs.

October also saw increased international demand, with a faster rise in exports.

Companies increased hiring, with overall job creation rising fastest in 18.5 years. Employment growth was higher in the services sector than in manufacturing.

Strong demand allowed firms to raise prices, with the sharpest price hikes in three months for items like chemicals, meat, packaging, steel, and vegetables.

Input costs are rising, putting pressure on manufacturers’ profit margins.

The business outlook was mixed: manufacturers were optimistic, while sentiment for services companies declined slightly.

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