Manufacturing PMI eases to 54.7 in October, but overseas demand at six-month high

Activity in the manufacturing sector slowed in October 2026 compared to its level in September, according to a private sector survey. However, new orders rose strongly, driven by orders from abroad rising to their highest level in six months, it said.

The private sector HSBC India Manufacturing Purchasing Managers’ Index (PMI) fell to 54.7 in October 2026 as compared to 55.1 in September. A reading over 50 denotes expansion, while one below 50 shows contraction in activity.

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“India’s manufacturing PMI softened to 54.7 in October from 55.1 in the previous month, but remained firmly in expansionary territory and above its long-run average,” Pranjul Bhandari, Chief India Economist at HSBC, said. “Strong international demand pushed growth of new export orders to a six-month high, supporting a robust rise in output.”

The report went on to say that growth eased only marginally from September’s seven-month high and remained strong by historical standards. The respondents said that favourable demand trends, new client wins, and successful marketing campaigns were behind the growth in October.

“Overseas markets contributed to the upturn, as new export orders increased at the fastest rate in six months,” the report said. “Companies reported gains from a broad range of destinations, including Bangladesh, Canada, Indonesia, Nepal, Oman, Saudi Arabia, Sri Lanka, the U.K., U.S. and the UAE.”

Even as demand increased, the survey respondents said that cost pressures eased in October.

“Although survey members reported higher prices for several materials and energy, the overall rate of input cost inflation retreated to its lowest since February,” the report said.

That said, the uncertain geopolitical environment played its part in affecting the decisions of businesses, leading them to front-load production.

“Producers also increased input inventories to the greatest extent in eight months, building precautionary buffers to mitigate potential shortages and meet rising production requirements amid a volatile global environment,” Ms. Bhandari said.