Indian manufacturing returned to growth last month as HSBC Manufacturing PMI, compiled by Markit, rose to 51.3 in November from October’s 49.6, boosted by a rebound in new orders and output. The news comes after the Indian economy grew at higher-than-expected 4.8 per cent in the second quarter against 4.4 per cent in the first quarter.
Manufacturing operating conditions across India improved in November, with leading companies raising their production levels for the first time since April. Purchasing activity also rose in November and job creation was sustained.
This was the first reading above 50.0 recorded since July. Even though the increase was moderate, manufacturing production rose for the first time in seven months during November.
“Strengthened demand resulted in new order growth and, although modest, the rise in new work intakes ended a five-month period of contraction. Export business increased at a marginal and slower rate, suggesting that the domestic market was the main source of new order gains,” said the report.
Inflationary pressure on manufacturers also eased during the period, with purchase prices rising at their weakest pace since August.
“Encouragingly, input and output price inflation eased, which, if sustained, could imply that the RBI is getting closer to the end of its tightening cycle, although it may still need to notch rates up a bit further,” said Leif Eskesen, chief economist for India & ASEAN at HSBC.
(Edited by Joby Puthuparampil Johnson)