Manufacturing index hits 3-month high in November as inflation eases

Manufacturing activities hit a three-month high in India in November, on the back of strong demand and lower input cost pressures, as per the S&P Global India Manufacturing Purchasing Managers’ Index (PMI).

The Index, compiled by S&P Global from responses to questionnaires sent to purchasing managers, stood at 55.7 in November, up from 55.3 in October. In PMI parlance, a print above 50 means expansion while a score below 50 indicates contraction.

“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,” Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said.

Firms were confident of growth prospects, as buying levels expanded and gave a strong show of underlying demand. This also improved job creation and restocking initiatives.

“Survey participants were also strongly confident in both the buoyancy of demand for their goods and their ability to further lift production in 2023. The level of positive sentiment recorded in November was the best in nearly eight years,” Lima said.

Lower input costs too were an enabling factor to the growth in manufacturing as prices receded to the joint-weakest rate in 28 months, while charges rose at the slowest pace since February.

“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. The overall rate of input cost inflation slipped to the joint-lowest in 28 months. 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,” Lima said.

On the jobs front, the survey said that employment rose solidly, and for the ninth month in a row.

(With agencies inputs)