India's Manufacturing and Services Activities Fall to 6-Month Low in Nov.
A reading above 50 indicates economic expansion, while one below 50 shows contraction in the manufacturing, services, or construction sectors
New Delhi: Indicating a slower rate of expansion, the combined performance of India’s manufacturing and services activities fell to a six-month low of 59.9 in November from 60.4 in October. Despite the fall, the overall growth in both the manufacturing and services sector remained strong and stayed well above the neutral mark, a private survey showed on Friday.
According to the seasonally-adjusted index — the HSBC Flash India Composite output index, compiled by S&P Global — for the first time since June, the index has slipped below the 60-mark, signalling a moderation in manufacturing to a nine-month low of 57.4, even as services expanded to 59.5 from 58.9 in the previous month. A reading above 50 indicates economic expansion, while one below 50 shows contraction in the manufacturing, services, or construction sectors.
Commenting on the survey, Pranjul Bhandari, chief India economist at HSBC, said that the HSBC flash manufacturing PMI eased, though the improvement in operating conditions remained healthy. “The rise in new export orders matched that seen in October. However, overall new orders came in soft, indicating that the GST-led boost may have peaked. Besides, cost pressures eased considerably, and so did prices charged,” Bhandari added.
As per the survey, the manufacturers experienced a softer increase in new orders compared to the previous month, while demand growth ticked higher in the service economy. “At the composite level, the latest rise in overall sales was sharp but the least pronounced in six months. Anecdotal evidence showed that the slowdown stemmed from challenges securing new business among some firms and heavy rain across parts of the country,” the survey noted.
The survey also showed that a combination of slower sales growth and falling backlogs reportedly stymied job creation across India’s private sector midway through the third fiscal quarter. “The latest increase in employment was the forty-second in consecutive months, but the least marked in over a year-and-a-half. Rates of expansion also eased at manufacturing firms and their services counterparts,” it said.