India’s manufacturing PMI rises to 56.0 in November

The manufacturing PMI has now spent 29 consecutive months above the key level of 50 that separates expansion and contraction in activity

India’s manufacturing sector activity continued to expand in November, with the S&P Global Purchasing Managers’ Index (PMI) rising to 56.0, data released on December 1 showed.

This was a rise from an eight-month low of 55.5 recorded in October. The gauge of manufacturing sector activity in November is above the key level of 50 – which separates expansion in activity from contraction – for the 29th month in a row.

“India’s manufacturing industry maintained its robust performance in November, with output regaining the growth momentum. Firms’ ability to secure new business, both domestically and from abroad, remained central to the success of the sector,” Pollyanna De Lima, economics associate director at S&P Global Market Intelligence, said.

“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,” she said.

The PMI data comes a day after the statistics ministry said the Indian economy grew faster-than-expected at 7.6 percent in July-September period, with the manufacturing sector growing 13.9 percent year-on-year.

The uptick in the manufacturing PMI in November was driven by a “substantial” increase in new work orders, S&P Global said, with the companies seeing positive demand trends, greater client requirements, and favourable market conditions.

However, while new export orders surged for the 20th month in a row in November, they did so at the slowest rate since June. On the whole, manufacturing output increased at an “above-trend pace”. This led to employment in the sector increasing for the eighth month in a row.

Policymakers, though, will be most enthused with S&P Global’s finding that input cost inflation in November was “negligible by historical standards” as it fell to its lowest level in the current 40-month run of increases. This helped push selling price inflation to a seven-month low, with fewer than 7 percent of manufacturers raising prices.

“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 said.