Manufacturing PMI At 10-Month High In November
Manufacturing PMI expanded at the best pace in 10 month but input price pressures remained acute.
A gauge of activity across India’s manufacturing sector expanded for the fifth straight month at an accelerating pace.
The IHS Markit India Manufacturing Purchasing Managers’ Index stood at 57.6 in November against 55.9 in October, according to the monthly release. A reading above 50 indicates economic expansion.
The reading signaled the strongest expansion for the sector in 10 months. The gauge also remains well above its long-run average of 53.6, the release said.
The Indian manufacturing industry continued to expand in November, with growth gathering pace and forward-looking indices generally pointing to further improvements in the months to come.Pollyanna De Lima, Economics Associate Director, IHS Markit
Manufacturers surveyed pointed to strengthening demand and improving market conditions. Factory orders rose at the fastest pace since February. Strong demand pushed up production volumes and output rose at the fastest rate in nine months.
"Underlying data suggested that the domestic market was the main source of sales growth," said the release. Export orders rose but at a pace weaker than in October.
Manufacturers also stocked up on inventories. "The pace of accumulation was sharp and the second-strongest recorded since data collection started in March 2005, surpassed only by that registered in February."
Inventory stocking also partly reflected a draw-down in post-production inventories, which fell as manufacturers fulfilled orders directly from stocks.
Input price pressures were strong but were only partly passed on in the form of higher output prices. Input prices increased at a pace similar to October's 92-month high, the release said.
The key threat to the outlook, in addition to potential new waves of Covid-19, is inflationary pressures. For now, companies are absorbing most of the additional cost burdens and lifting output charges only moderately.Pollyanna De Lima, Economics Associate Director, IHS Markit
The November data also pointed to an improvement in hiring activity among goods producers. "Although fractional overall, the latest expansion was only the second over the past 20 months."