India Manufacturing PMI Eases To Joint 11-Month Low Of 56.5 In November

India's manufacturing activity expanded at a slower pace in November even as selling prices rose to the greatest extent since October 2013.

Falling from 57.5 in October to a joint 11-month low of 56.5 in November, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index signalled a softer improvement in the health of the sector, as per a press release on Monday. In September too, manufacturing PMI was at 56.5. To be sure, the pace of growth remained above its long-run average.

Goods producers experienced a weaker upturn in new business intakes during November. The rate of expansion was the second-weakest in 11 months, ahead of that registered in September. Growth was supported by favourable demand conditions, but stymied by fierce competition and price pressures.

The latest results showed that Indian goods producers increased their selling prices to the greatest extent since October 2013. Survey participants suggested that additional outlays on freight, labour and materials had been shared with clients.

Input cost inflation intensified midway through the third fiscal quarter, reaching its highest mark since July but remaining below its long-run average. Items such as chemicals, cotton, leather and rubber were reported as up in price. Although price pressures curbed domestic sales to a certain extent, growth of new export orders gained momentum. The rate of expansion in international demand was the best seen for four months.

With demand conditions remaining favourable, Indian manufacturers continued to scale up production. The rate of expansion receded to the weakest in the calendar year-to-date, though remained historically strong. The slowdown reportedly reflected competitive conditions, inflationary pressures and subdued orders at some units.

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.

Business optimism was spurred by predictions that marketing efforts and new product releases will bear fruit. Recent capacity expansion efforts and forecasts of demand strength also underpinned upbeat forecasts for output in 2025.