New Delhi: India’s manufacturing sector continued with its robust performance in November, mainly on the back of substantial easing in price pressures and strengthening demand from clients, a monthly survey said Friday.
The strong performance of the manufacturing sector is expected to continue in 2024 as well.
The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) rose to 56 last month from the eight-month low level of 55.5 recorded in October.
“A key feature of the latest results was a substantial easing of price pressures. Although average purchasing costs rose again, the rate of inflation eased to the lowest in the current 40-month sequence of increases and was negligible by historical standards,” it said.
Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said India’s manufacturing industry maintained its robust performance in November, with output regaining growth momentum.
Firms’ ability to secure new business, both domestically and from abroad, remained central to the success of the sector. Sustained new order growth continued to be good news for the sector’s labour market, with recruitment remaining on an upward path, De Lima noted.
“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,” De Lima said.
The survey is prepared by S&P Global based on responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.
After slowing in October, growth of output gathered pace as strengthening client demand and more favourable input supply boosted production volumes, the survey said.
Inflationary pressures retreated, with purchase costs rising at the weakest pace since the current sequence of increases began in August 2020. Charges rose modestly, as the vast majority of firms opted to leave their fees unchanged since October, it said.
In PMI parlance, a print above 50 means expansion while a score below 50 denotes contraction.
De Lima also said that 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.
“Some concerns over prices increasing in the near-term were reflected in the data for business sentiment, but there was also a softer uptick in output charges amid a reduced inflationary environment,” De Lima added.
PTI
