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Photo: Bloomberg
Photo: Bloomberg

India's manufacturing PMI hits 3-month low in November

  • There were slower increases in factory orders, exports, buying levels and output while pandemic related restrictions caused a further drop in payroll numbers

Growth in the Indian manufacturing sector lost momentum in November with the Purchasing Managers’ Index (PMI) falling to a three-month low.

Data released by the analytics firm IHS Markit showed India’s PMI manufacturing dropped to 56.3 in November from an over 12-year high of 58.9 in October.

There were slower increases in factory orders, exports, buying levels and output while pandemic related restrictions caused a further drop in payroll numbers. Input costs and output charges rose at accelerated rates that nevertheless remained below their respective long-run averages.

Pollyanna De Lima, economics associate director at IHS Markit said the softening of rates of expansion seen in the latest month does not represent a major setback, since these are down from over decade highs in October, a spike in covi-19 cases and the possibility of associated restrictions could undermine the recovery. “For now, firms are projecting sustained demand growth in the near-term and responded to this by lifting input buying to increase their safety stocks. Employment remained in contraction territory with companies reportedly keeping the minimum possible number of workers as per government guidelines." She added.

The pace of contraction in the Indian economy slowed in September quarter to 7.5% from a historic high of 23.9% contraction in June quarter. While some agencies have revised upward their GDP forecasts for India, S&P Global Ratings on Monday stuck to its earlier projection of 9% dip in GDP in FY21, holding it awaits more proof of sustained recovery in economic activities.

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