India’s Manufacturing PMI Eases to 54.7 in October, but Export Orders Hit a Six-Month High

India’s factory activity kept expanding in October, though at a slightly slower pace, with a firm uptick in overseas orders offering the brightest signal for the country’s export supply chains. The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index, compiled by S&P Global, eased to 54.7 in October from 55.1 in September. Any reading above 50 still signals expansion, and the latest print remains comfortably above the index’s long-run average.

For freight and logistics operators, the headline dip matters less than the composition of demand. While overall new business growth softened marginally from September’s seven-month high, new export orders climbed at their fastest rate in six months — a reading that typically precedes stronger container bookings, port throughput and outbound cargo volumes in the following quarters.

Overseas demand broadens across regions

Manufacturers reported firmer demand from a wide spread of markets, including Bangladesh, Canada, Indonesia, Nepal, Oman, Saudi Arabia, Sri Lanka, the UK, the US and the UAE. That geographic mix spans South Asia, the Gulf, Southeast Asia and the West, suggesting the export pickup is not dependent on a single trade lane.

“Strong international demand pushed growth of new export orders to a six-month high, supporting a robust rise in output,” said Pranjul Bhandari, chief India economist at HSBC.

The survey linked the rise in new business to favourable demand trends, new client wins and successful marketing campaigns rather than to price-led competitiveness.

Output and inventory build shape cargo flows

Factory production continued to rise, though the pace of growth moderated from September. More notably for warehouses and inland logistics, manufacturers kept building stock. Input inventories increased at the fastest pace in eight months as firms created precautionary buffers against potential shortages and prepared for production in a volatile global environment. Stocks of finished goods, meanwhile, rose at a record pace in the survey’s more than 21-year history, with firms citing buoyant demand and efforts to avoid shortfalls.

That combination — strong export orders alongside heavy inventory accumulation — points to sustained warehousing utilisation and steady outbound dispatch requirements, even as some companies hold buffer stock closer to production lines.

There was a counterpoint on the inbound side. The pace of raw material purchasing growth slowed to its weakest in a 64-month sequence of expansion, a signal that input-side cargo volumes may grow more slowly than output in the near term.

Hiring slows even as jobs grow

Factory employment rose for the second consecutive month, supported by higher production requirements and rising workloads, but the rate of job creation eased from September. Capital goods manufacturers reduced headcount during the month, while consumer and intermediate goods segments held up better.

Cost pressures cool to February lows

Input cost inflation fell to its lowest level since February, with cost pressures easing across all three broad manufacturing segments tracked by the survey. Some materials and energy costs rose, but the overall rate of increase moderated. Selling price inflation also cooled, with output price increases the slowest in nearly four years.

“Although some material and energy costs increased, overall input and output price pressures eased slightly from the previous month,” Bhandari said.

Business confidence softens

Despite healthy demand, manufacturers turned less optimistic about the year ahead. Confidence slipped from September and stayed below its long-run average. Close to 18 per cent of firms expected output to rise over the coming year, with the remainder neutral. Optimism was anchored in new client enquiries and demand for industrial automation and technology solutions.

The HSBC India Manufacturing PMI is compiled from questionnaire responses from purchasing managers at a panel of around 400 manufacturers.

FAQs

1. What was India’s manufacturing PMI in October 2026?
The HSBC India Manufacturing PMI stood at 54.7 in October 2026, down from 55.1 in September. It stayed above the 50 mark that separates expansion from contraction and above its long-run average.

2. Did export orders grow in October?
Yes. New export orders rose at their fastest pace in six months, driven by demand from markets including Bangladesh, Canada, Indonesia, Nepal, Oman, Saudi Arabia, Sri Lanka, the UK, the US and the UAE.

3. Why does this matter for the shipping and logistics sector?
Stronger export order books generally translate into higher container bookings, port throughput and outbound cargo volumes over subsequent months. Record finished-goods inventory building also supports warehousing demand, though slower raw material purchasing suggests inbound volumes may lag.

4. Which sectors saw weaker hiring?
Capital goods manufacturers reduced staff in October, even as overall factory employment rose for a second straight month. The pace of job creation across the sector eased from September.

5. Did price pressures ease?
Yes. Input cost inflation dropped to its lowest since February, and output price increases were the slowest in nearly four years, offering some relief on freight and production cost pass-through.