Mumbai: The pace of India’s manufacturing activity rose in September, recovering from a drop to a five-month low in August, as domestic demand and robust factory orders picked up, a survey showed. The HSBC Markit Purchasing Managers’ Index (PMI), based on a survey of 500 companies, rose to 55 in September from from 53.2 in August.

The index has been above 50, which separates expansion from contraction, for six months. Before that, it shrank for five consecutive months through March, hitting a trough of 44.4 in December 2008.

“It is encouraging to see the PMI index move up again in September after last month’s decline, allaying fears that the industrial cycle has peaked,” said Robert Prior-Wandesforde, senior Asia economist at HSBC.

“Given that the full effects of the monetary and fiscal stimulus have still to be felt, while oil and gas output is set to rise and the regional, world trade cycle should improve, we are confident that industrial growth will not just remain firm but trend higher from here,” he added.

The new orders index rose to 58.3, from August’s 56.2, which was its lowest in four months.

Wandersforde said the positive drivers for industrial growth should more than offset the negative effects of the drought.

“With overall orders improving sharply to 58.3, the implication is that domestic demand strengthened considerably in September,” he said.

“On the activity side, the most disappointing aspect of the release was the small fall in the export orders balance to 50.9,” he added.