India's manufacturing PMI rises to 56 in November, input costs at 40-month low | Mint
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Business News/ Economy / India's manufacturing PMI rises to 56 in November, input costs at 40-month low

India's manufacturing PMI rises to 56 in November, input costs at 40-month low

The S&P Global India Manufacturing Purchasing Managers' Index (PMI) climbed to 56 last month, rebounding from October's eight-month low of 55.5

The Manufacturing PMI survey covers the formal sector (Photo: Mint)Premium
The Manufacturing PMI survey covers the formal sector (Photo: Mint)

India’s manufacturing activity accelerated in November from an eight-month-low recorded the preceding month on robust demand, while input cost inflation slipped to 40-month low, a private survey said.

The purchasing managers index (PMI) for manufacturing rose to 56 in November, up from 55.5 in October, though it remained below 57.5 reported in September, according to S&P Global Market Intelligence. During October, manufacturing activity recorded the slowest rate of expansion since February. The 50-mark separates expansion from contraction.

The latest survey result comes a day after the data showed that the Indian economy grew at an impressive rate of 7.6% in the second quarter.

The rise in manufacturing activity was accompanied by a substantial easing of price pressures, the survey said. “Although average purchasing costs rose again, the rate of inflation eased to the lowest in the current 40-month sequence of increases and was negligible by historical standards," it said.

The survey said Indian manufacturers that hiked prices reported strengthening demand amid higher labour costs during November. “Rising costs translated into increased selling prices, albeit one that was the weakest in seven months," it added.

Retail inflation fell to a four-month low of 4.87% in October as food prices eased, remaining within the Reserve Bank of India’s (RBI’s) comfort zone of 2-6% for the second consecutive month.

However, India’s merchandise trade deficit widened to a record high in October to $31.46 billion last month, with imports at $65.03 billion and exports at $33.57 billion.

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Exports continue to be impacted by a slowdown in global growth, especially in advanced economies, which are also seeing tightening interest rates due to nagging inflation, slowing down global trade.

“India’s manufacturing industry maintained its robust performance in November, with output regaining growth momentum. Firms’ ability to secure new business, both domestically and from abroad, remained central to the success of the sector," said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.

“Expanded capacities, rising workloads and the need to replenish stocks of finished goods collectively indicated that India’s manufacturing economy is clearly in good shape as 2023 draws to a close, with expectations for a continued strong performance in 2024," she added.

During October, the output of eight core infrastructure sectors that accounts for two-fifths of India’s industrial output rose by 12.1% against 0.7% expansion reported in the year-ago period due to a sharp uptick in production of coal, steel, cement and electricity, according to the official data released by the commerce ministry on Thursday.

Commerce ministry data showed that the output growth of coal, steel, electricity, and cement grew at double digits during October.

The survey said while total new sales rose, demand conditions remained positive and input supply improved, resulting in manufacturers scaling up production volumes. Output expanded sharply and at an above-trend pace, the PMI-Manufacturing survey said.

“Manufacturing employment in India increased for the eighth successive month heading towards the end of the 2023 calendar year," it added. The S&P Global India Manufacturing PMI survey for November was compiled from responses of 400 manufacturers.

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Published: 01 Dec 2023, 12:24 PM IST
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