India’s manufacturing sector activity expanded at its fastest pace in over a decade in October as demand and output continued to recover strongly from Covid-19 disruptions even as firms cut more jobs, a monthly survey said on Monday.

IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) rose from 56.8 in September to 58.9 in October, and pointed to the strongest improvement in the health of the sector in over a decade.

In April, the index had slipped into contraction mode, after remaining in the growth territory for 32 consecutive months. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.

“Levels of new orders and output at Indian manufacturers continued to recover from the Covid-19 induced contractions seen earlier in the year, with the PMI results for October highlighting historically-sharp monthly rates of expansion,” said Pollyanna De Lima, economics associate director at IHS Markit.

Lima said: “Companies were convinced that the resurgence in sales will be sustained in coming months as indicated by a strong upturn in input buying.”

Manufacturers indicated that the ongoing relaxation of Covid-19 restrictions, better market conditions and improved demand helped them to secure new work in October.

Both output and new orders grew at their sharpest rates in more than 12 years and foreign demand expanded at its quickest pace since December 2014.

But firms cut 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.

Meanwhile, the yearly SBI Composite Index has gone above the psychological level of 50 and stood at 53.0 (moderate growth) in October 2020.