Mumbai: Manufacturing activity in the country based on the ABN AMRO Bank purchase managers'' index (PMI) expanded to a seasonally adjusted 61.7 in October from 59.3 in September, the fastest in 31 months since the survey started in April 2005.

The PMI, compiled by UK-based NTC Research, tracks changes in manufacturing business conditions by polling 500 companies each month on output, new orders, employment and prices.

A reading above 50.0 signals expansion while readings below 50.0 suggest contraction.

The finding, which signalled the economy remained strong despite a series of monetary tightenings, was also aided by a pick-up in demand during the festival season, which usually starts in September and runs until December.

The festival demand generally spurs spending on clothes and consumer goods such as motorcycles, cars and televisions.

"The October PMI survey results suggest that the recovery and the subsequent improvement in overall business conditions over last three months is on a broader base and therefore sustainable," said Gaurav Kapur, an economist at ABN Amro Bank.
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The new orders index rose to 70.9 in October, its highest level in the survey''s history, from 66.6 in September. The new export orders index climbed to 61.0 in October, also a survey high, from 56.6 in September.

Output kept pace with new orders, with the index rising to a survey peak of 66.6 from 62.8 in September. The output prices index rose to 55 in October, its highest level since August 2006, from 53.3 in September. Input prices eased to a 3-month low of 54.1 in October from 56.8 in September.