India’s manufacturing PMI hits 10-month high in Nov at 57.6

India’s manufacturing PMI increased the fastest in 10 months in November. Manufacturing activity increased at 57.6, which is a jump from 55.9 in October. “Increasing from 55.9 in October to 57.6 in November, the seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) signalled the strongest improvement in the health of the sector for ten months,” stated IHS Markit India in a report.

The manufacturing sector continued its strong expansion in November as sales accelerated and production saw the fastest upturn in nine months, IHS Markit India said. Input buying was scaled up by companies which led to the second-quickest accumulation in stocks of purchases since data collection started nearly 17 years ago, it said.

Hiring activity also saw an improvement, after three successive months of downturn.

However, there was little change in the purchase price inflation from October’s high due to supply-demand mismatches and increased transportation costs.

“Manufacturers stated that strengthening demand, improving market conditions and successful marketing boosted sales in November. Factory orders rose for the fifth successive month and at a sharp pace that was the fastest since February,” it said. Domestic market was the mainsource of sales growth, it said, citing underlying data.

The report mentioned, “Buoyed by the pick-up in demand, companies stepped up production volumes during November. Output rose sharply and at the fastest rate in nine months.”

Inventories of raw materials and semi-furnished items also increased, but post-production inventories decreased as orders were fulfilled from stocks.

“On the price front, the latest results showed that cost inflationary pressures remained intense amid transportation issues and difficulties among suppliers to source raw materials. Input  prices increased at a rate that was broadly similar to October's 92-month high,” it added.

“Although manufacturers remained upbeat towards growth prospects, the overall level of positive sentiment slipped to a 17-month low. Companies were concerned that inflationary pressures could dampen demand and restrict output in the year ahead,” it concluded.

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