Manufacturing PMI hits 10 month high in November

The IHS Market India Manufacturing Purchasing Managers Index (PMI) increased to 57.6 in November from 55.9 in October

The manufacturing activity in November expanded at its fastest pace seen in recent times since February, supported by accelerated sales, as per a private survey released on Wednesday.

The IHS Market India Manufacturing Purchasing Managers Index (PMI) increased to 57.6 in November from 55.9 in October, a month ago. A reading above 50 reflects expansion. Further, hiring activity improved after three months of job shedding, as the rate of purchase price inflation remained little changed from October’s peak.

“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,” said Pollyanna De Lima, Economics Associate Director at IHS Markit. 

“The fact that firms purchased additional inputs at a stronger rate amid efforts to restock, combined with recurring declines in inventories of finished goods and tentative signs of a pick-up in hiring activity, indicate that production volumes will likely expand further in the near term,” Lima further added.

According to Lima, inflationary pressures in addition to potential new waves of COVID-19 (new variant) threaten the outlook even as companies are absorbing the additional cost burden and passing off it moderately.

“Businesses were indeed worried that inflationary pressures could hamper demand and production in the year ahead, as signalled by confidence weakening to the lowest in almost a year-and-a-half,” Lima added.