India's manufacturing PMI declines to 55.5 in December 2021

3 Jan 2022 , 03:43 PM

At 55.5 in December, the seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) pointed to a robust improvement in overall operating conditions that was elevated by historical standards. This was despite the headline figure slipping from November’s ten-month high of 57.6. Moreover, the latest quarterly reading was at 56.3, its highest since the final quarter of fiscal year 2020/21.

The health of the Indian manufacturing industry improved further in December, with growth of new work and production remaining sharp in spite of losing momentum. Companies continued with their stock-building initiatives, as evidenced by another robust upturn in buying levels. Business confidence strengthened, but sentiment was again dampened by concerns surrounding supply-chain disruptions, COVID-19 and inflationary pressures.

Although input costs rose sharply, and at an above-trend pace, the rate of inflation eased to a three-month low. Companies in turn restricted the passing on of additional cost burdens to clients, with factory gate charges increasing at the slowest pace in over a year.