New Delhi: After slowing in October, India's manufacturing sector continued to perform well in November as the growth of output gathered pace, strengthening client demand and more favourable input supply boosted production volumes. Picking up from October's eight-month low of 55.5 to 56.0 in November, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) indicated a stronger improvement in operating conditions, a private survey showed on Friday.
The PMI data comes a day after the statistics ministry said that the Indian economy grew faster-than-expected at 7.6 percent in July-September period, with the manufacturing sector growing 13.9 percent year-on-year. The gauge of manufacturing sector activity in November is above the key level of 50 - which separates expansion in activity from contraction - for the 29th month in a row.
As per the survey, the rising costs translated into increased selling prices, albeit one that was the weakest in seven months. "Manufacturers that hiked their fees, which were fewer than 7 per cent of panellists, mentioned demand strength, greater labour costs and the usage of higher-quality inputs in production processes. The November data showed another substantial increase in overall levels of new work received by Indian goods producers," the survey showed.
"Moreover, the growth rate improved from October's one-year low and outpaced the series average. Surveyed companies commonly reported positive demand trends, greater client requirements and favourable market conditions.The trend for new export business showed signs of resilience, despite weakening in November. New export orders rose for the twentieth month in a row and solidly, albeit at the slowest rate since June," it said.
Commenting the survey, Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said, "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. However, the sustained new order growth continued to be good news for the sector’s labour market, with recruitment remaining on an upward path," Lima said.
"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. Prices for raw materials and components still rose in November, but improved availability at suppliers amid subdued global demand for inputs led to a considerable retreat in cost pressures. Some concerns over prices increasing in the near-term were reflected in the data for business sentiment, but there was also a softer uptick in the output charges amid a reduced inflationary environment," Lima added.
