Manufacturing sector activity rebounded slightly in November from October’s eight-month low pace, as per the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) that rose to 56 from 55.5, but positive sentiment among firms dropped to the lowest level in seven months.
New orders improved at a better pace than October’s one-year low, but the uptick in export orders was the slowest since June. With total new sales rising and demand conditions remaining, Indian manufacturers scaled up production volumes and output expanded sharply and at an above-trend pace.
Manufacturing employment among firms surveyed for the index, increased for the eighth successive month but at a moderate pace. The uptick in output was aided by input costs inflation easing to a 40-month low and producers opted to raise output costs at the slowest pace in seven months.
Surveyed firms’ outlook on future prospects remained favourable in November, with firms seeing opportunities in the form of demand strength, marketing initiatives and new clients making enquiries about a wide range of products. However, the overall level of positive sentiment slipped to a seven-month low amid rising inflation expectations.
“Prices for raw materials and components still rose in November, but improved availability at suppliers amid subdued global demand for inputs led to a considerable retreat in cost pressures,” said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence However, there were some concerns over prices increasing in the near-term reflected in the data for business sentiment, she added.
“Sustained new order growth continued to be good news for the sector’s labour market, with recruitment remaining on an upward path. Expanded capacities, rising workloads and the need to replenish stocks of finished goods collectively indicated that India’s manufacturing economy is clearly in good shape as 2023 draws to a close, with expectations for a continued strong performance in 2024,” Ms. De Lima averred.