Mumbai/New-Delhi: The Indian economy for the month of October healed at record levels according to findings from the Purchasing Manager's Index. The PMI finding said that the speed of recovery in factory activity for October was the fastest in over a decade. The growth was owing to demand and output that have recovered from the Coronavirus related disruptions.
The Nikkei Manufacturing Purchasing Managers' Index INPMI=ECI, compiled by IHS Markit, rose to 58.9 in October from September's 56.8. The reading was the highest since May 2010 and above the 50-level separating growth from contraction for the third straight month.
"Levels of new orders and output at Indian manufacturers continued to recover from the Covid-19 induced contractions seen earlier in the year," said Pollyanna De Lima, economics associate director at IHS Markit.
Removal on Covid induced restrictions may have helped Asia's third largest economy recover its standings. The Indian economy shrunk by nearly 24 percent during the April-June quarter.
"Companies were convinced that the resurgence in sales will be sustained in coming months, as indicated by a strong upturn in input buying amid restocking efforts," added Lima.
Both output and new orders, which tracks overall demand, grew at their sharpest rates in more than 12 years and foreign demand expanded at its quickest pace since December 2014.
Input and output prices increased at a faster pace last month, although most of the burden of rising price pressures was carried by firms.
Business optimism about the coming 12 months increased to its highest level since August 2016.
"Confidence towards the year-ahead outlook for production improved as firms hoped that fewer Covid-19 cases and the reopening of other businesses could boost output growth," added De Lima.
For all the economic recovery, Jobs market have remained an aberration. The survey found firms cutting staff for the seventh month in a row, a streak not witnessed since the survey began in 2005, signaling a quick recovery in the consumer-driven economy may be a distant possibility.
On Monday, the Centre for Monitoring Indian Economy (CMIE) report revealed that India's unemployment rate for October rose to 6.98% from 6.67% in September.