The pace of India’s manufacturing growth remains above its long-run average and there was substantial improvement in the health of the sector during November, the HSBC India Manufacturing PMI data showed on Monday. India recorded a 56.5 manufacturing PMI in November, down slightly from the prior month, but still firmly within expansionary territory.
“Strong broad-based international demand, evidenced by a four-month high in new export orders, fuelled the Indian manufacturing sector’s continued growth,” HSBC’s Chief India Economist Pranjul Bhandari said. Although price pressures curbed domestic sales to a certain extent, the growth of new export orders gained momentum. The rate of expansion in international demand was the best seen for four months, with panellists reporting gains from Bangladesh, mainland China, Colombia, Iran, Italy, Japan, Nepal, the UK, and the US.
With demand conditions remaining favourable, Indian manufacturers continued to scale up production. For the ninth month in a row, factory employment in India increased during November.
Despite softening from October, the rate of job creation remained solid. According to panel members, staff had been hired on both permanent and temporary bases, according to the seasonally-adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global. Indian manufacturers purchased additional inputs for use in production processes and to place into inventories.
The rise in buying levels was sharp, albeit the weakest in just under a year. “Average lead times shortened further, reportedly due to strong relationships with long-standing suppliers. The improvement in vendor performance was mild but nevertheless the best since July,” the report mentioned. Subsequently, manufacturers were able to add to their input stocks again. The rate of accumulation was notably above its long-run average.
