India’s Purchasing Managers’ Index (PMI) for manufacturing rose slightly to 55.7 in November from 55.3 in October to post a three month high amid an increase in new orders and production, and a slowdown in inflation. The headline figure is above its long-run average of 53.7.
The survey compiled by the rating agency – S&P Global, and released on Thursday reflected an improvement in employment and purchases by factories. A print above 50 in the survey indicates expansion in manufacturing activity. A score below that represents contraction.
“Firms were strongly confident towards growth prospects, with optimism driving another round of job creation and restocking initiatives. Buying levels expanded at a marked and accelerated rate as firms also sought to benefit from relatively mild price pressures.
Input cost inflation receded to the joint-weakest rate in 28 months, while charges rose at the slowest pace since February,” the survey said.
The survey noted that the November data highlighted the seventeenth successive expansion in manufacturing production across India, as companies responded to ongoing increases in new work intakes.
Pollyanna De Lima, economics associate director at S&P Global Market Intelligence, said the Indian manufacturing sector performed well in November amid heightened recession fears elsewhere and a deteriorating economic outlook globally.
“It was business as usual for goods producers, who lifted production volumes to the greatest extent in three months amid impressive evidence of demand resilience. New orders and exports expanded markedly in the latest month,” she added.
Even though the firms strove to build inventories and lift production to accommodate higher sales, the rate of cost inflation softened considerably in November, as it was the joint-weakest in 28 months and well below its long-run average.
“Companies were also aided by a substantial cooling of cost pressures in November, a factor that prompted them to purchase more inputs and add to their inventories. Buyers of Indian manufactured goods likewise gained from this retreat in cost inflation, as 92 per cent of surveyed firms left their selling prices unchanged from October,” De Lima added.
Besides, the survey noted that employment rose solidly, and for the ninth month in a row. Firms are confident of demand remaining strong in the coming 12 months and foresee growth in production volumes.
Earlier on Monday, S&P Global Ratings had pared down its FY23 growth forecast for India to 7 per cent from 7.3 per cent estimated in September, though the rating agency had maintained that domestic demand recovery would support growth in India.
“The global slowdown will have less impact on domestic demand-led economies such as India, Indonesia, and the Philippines. India’s output will expand 7 per cent in the fiscal year 2022-2023 (ending in March 2023) and 6 per cent in the next fiscal year, by our estimates,” the agency had said.
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