Growth in India’s manufacturing sector slipped to 56.5 in November stymied by fierce competition and price pressures.
Compiled by S&P Global, the HSBC final India manufacturing Purchasing Managers’ Index’s (PMI) fall in November was a joint 11-month low from 57.5 in October. Earlier, in January, the figure had stood at 56.5.
“Goods producers experienced a weaker, albeit still robust, upturn in new business intakes during November. The rate of expansion was the second-weakest in 11 months, ahead of that registered in September,” the survey said.
Growth was supported by favourable demand conditions, but stymied by fierce competition and price pressures. Indeed, the latest results showed that Indian goods producers increased their selling prices to the greatest extent since October 2013, it added.
November’s PMI marked the slowest expansion in 2024 to date, although the rate of accumulation was still above the long-run average. Additionally, the streak of declining finished goods stocks, which began in August 2017, came to an end.
On the inflation front, the survey notes that input cost inflation intensified midway through the third fiscal quarter, reaching its highest mark since July, but remaining below its long-run average. Items such as chemicals, cotton, leather and rubber were reported as up in price.
Further on the employment front, the survey noted that for the ninth month in a row, factory employment in India increased during November, which despite softening from October, the rate of job creation remained solid.
The Manufacturing PMI is a key economic indicator that tracks the health of the manufacturing sector. It provides insights into various aspects of manufacturing activity, including production levels, new orders, employment, supplier delivery times, and input costs.
Manufacturing PMI below 50 indicates contraction in manufacturing activity, the number above 50 signals expansion in manufacturing activity, and a PMI at 50 suggests stagnation, with no significant change in manufacturing activity.