Workers attach an elevated Lucknow Metro Rail Corp. mass rapid transport (MRT) passenger car to it’s truck at the Alstom SA manufacturing facility in Sri City, Andhra Pradesh. (Photographer: Udit Kulshrestha/Bloomberg)

India’s Manufacturing PMI In December Eases From 11-Month High

India’s manufacturing sector activity slowed down in December from the previous month but remained the second highest in 2018 as companies continued to scale up production and employment in response to strong inflows of new business.

The Nikkei India Manufacturing Purchasing Managers’ Index fell to 53.2 in December from 54 in November, the highest in 11 months. This was, however, the 17th consecutive month that the manufacturing PMI remained above the 50-point mark.

In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.

“The output continued to rise strongly in line with a robust upswing in sales. The companies benefited from rising international demand for Indian goods, as export orders expanded for the 14th straight month,” Pollyanna De Lima, principal economist at IHS Markit, said in a monthly report.

Here are the key highlights:

  • Employment continued to expand in December, but companies still signalled increased volumes of work in hand.
  • Job creation weakened while backlogs were accumulated to the quickest extent since May.
  • Input costs rose the least in 34 months leading to stable charges.
  • The level of confidence moderated from mid-quarter and was subdued in the context of historical survey data.