NEW DELHI :
India’s troubled manufacturing sector made a slight recovery in November, having hit a two-year trough in October, but shed jobs in the face of challenging economic conditions, according to a private survey.
The headline seasonally adjusted IHS Markit India manufacturing purchase managers’ index (PMI), based on a survey of 400 producers, rose to 51.2 in November from the two-year low of 50.6 in October, the market information supplier said in a statement on Monday. A figure above 50 indicates expansion, while a sub-50 reading indicates contraction. The survey tracks new orders, output, jobs, suppliers’ delivery time and stocks of purchases.
The latest reading indicated only a slight improvement in the health of the manufacturing sector, aided mainly by consumer goods.
“Although business conditions in the Indian manufacturing sector improved in November, the upturn remained subdued compared to earlier in the year and the survey history. Growth rates for new orders and production were modest, despite accelerating from October's recent lows, while firms shed jobs for the first time in 20 months and continued to reduce input buying," IHS Markit said in the statement.
Competitive pressures have hit pricing power of companies as well. The survey said there were only slight increase in input costs and output prices halfway through the third quarter of fiscal year 2020. Operating conditions at capital goods makers deteriorated in November. The survey, quoting anecdotal evidence, said growth was supported by the launch of new products and better demand, though restrained by competitive pressures and unstable market conditions. Total sales increased for the twenty-fifth month in a row.
The challenging economic condition have affected jobs too. Subdued sales prevented hiring in November, with payroll numbers declining for the first time in 20 months, the IHS Markit statement said, adding that a number of companies have been managing workload with existing staff, while others reported non-replacement of retirees and non-renewal of temporary contracts.