The Nikkei India Manufacturing Purchasing Managers’ Index
(PMI) rose for the third consecutive month in November, up from 53.1 in October to 54. The latest figure signalled the strongest improvement in the health of the sector in almost one year.
Manufacturing operating conditions in India strengthened for the third successive month in November, as healthier inflows of new orders encouraged companies to lift production and input buying to greater extents than in October. Cost inflation moderated, but the revival in demand translated into improved pricing power among producers who raised their charges at a quicker rate. Elsewhere, job creation was sustained while sentiment picked up.
Buoyed by stronger demand conditions and greater sales, manufacturers increased production at the second-quickest pace since October 2016. The rise was led by intermediate goods firms, although robust growth was also seen in the consumer and capital goods categories.
Commenting on the Indian Manufacturing PMI survey data, Pollyanna De Lima, Principal Economist at IHS Markit and author of the report said, “The Indian manufacturing sector continued to recover from ground lost in August, with November seeing the headline PMI climb to an 11-month high.”
“The relatively weak demand environment seen earlier in the year showed signs of abating, with clients unfazed by another round of increases in output prices and placing more orders regardless. Correspondingly, goods producers rebuilt raw material stocks in order to guard against possible delivery delays and fulfil contracts. “Manufacturers further drew down their finished goods stocks to meet demand. This, coupled with improved business sentiment, should ensure that production continues to rise at a robust clip as we head towards 2019.”
“Signs of rising confidence in the upturn were also provided by the trend for employment, which continued to grow at one of the quickest rates seen in six years. Supply-chain pressures remained weak, however, which supported a softer rise in input prices,” Pollyanna De Lima added.