India's manufacturing sector continued expanding in October, although growth moderated as factory output and new orders increased at a slower pace, according to the latest HSBC India Manufacturing Purchasing Managers' Index (PMI).
The seasonally adjusted index declined to 54.7 from 55.1 in September, data released on Monday showed.
Despite the slowdown, the reading remained above its long-term average and the 50-point mark separating expansion from contraction.
The survey, compiled by S&P Global, indicated that improving demand, customer acquisitions and marketing initiatives continued to support manufacturers.
New business expanded sharply during October, although growth eased from September's seven-month high.
International demand provided a major boost, with new export orders recording their fastest increase in six months.
Manufacturers reported stronger orders from Bangladesh, Canada, Indonesia, Nepal, Oman, Saudi Arabia, Sri Lanka, the United Kingdom, the United States and the United Arab Emirates.
Improving overseas demand, domestic sales and new product launches supported another substantial rise in production.
However, output growth slowed compared with September, largely because intermediate goods manufacturers recorded weaker expansion.
Nevertheless, this segment remained the strongest contributor to overall manufacturing output growth.
HSBC Chief India Economist Pranjul Bhandari said the sector continued to demonstrate resilience despite the moderation in headline PMI.
Manufacturers also increased input inventories at the fastest pace in eight months to guard against potential shortages and support future production requirements.
The survey indicated easing inflationary pressures across the manufacturing sector.
Although certain raw materials and energy inputs became more expensive, overall input cost inflation fell to its lowest level since February.
Cost pressures moderated across all three major manufacturing categories covered by the survey.
Companies continued raising selling prices to protect profit margins, but the increases were marginal.
The rate of selling price inflation slowed to its weakest level in nearly four years.
The October findings suggest that India's manufacturing sector maintained expansionary momentum, supported by export demand, even as domestic business growth and price pressures moderated.
