India's manufacturing PMI grows in Nov for first time in 5 months

New Delhi: India’s manufacturing sector activity witnessed an expansion in November for the first time since July, driven by rising new domestic orders, an HSBC survey said today.

The HSBC India Manufacturing Purchasing Managers’ Index (PMI) for the manufacturing industry climbed from 49.6 in October to 51.3 in November on the back of a rebound in new orders and output.

[caption id=“attachment_1104943” align=“alignright” width=“380”]  Reuters.[/caption]

This was the first manufacturing PMI reading above 50.0 since July and is the highest in seven months. The PMI reading of above 50 differentiates growth from contraction.

“Manufacturing activity picked up, led by a rise in new domestic orders which helped pull up output growth,” HSBC Chief Economist for India and ASEAN Leif Eskesen said.

More from Economy

Inflation likely to be a big focus area for budget 2024, say sources Explained: Will the Bank of Japan break tradition and raise interest rates?

Meanwhile, according to official data released last Friday, the second quarter GDP figure is also an indication of an economic recovery.

After sluggish growth in the first quarter, Indian economy grew by 4.8 per cent in the second quarter this fiscal due to improved performance of farm, manufacturing, construction and

services sectors.

HSBC further noted that manufacturing production rose for the first time in seven months during November. Moreover, the rise in new work intakes ended a five-month period of contraction.

Meanwhile, export business increased at a marginal and slower rate, suggesting that the domestic market was the main source of new order gains.

According to HSBC, inflationary pressures in the Indian manufacturing economy softened in November.

“Encouragingly, input and output price inflation eased, which, if sustained, could imply that the RBI is getting closer to the end of its tightening cycle, although it may still need to notch rates up a bit further,” Eskesen said.

The Reserve Bank had hiked policy interest rates by 0.25 per cent each in September and October to bring down the stubbornly high inflation.

The Wholesale Price Index (WPI) based inflation stood at 8-month high of 7 per cent in October, while the retail inflation, based on Consumer Price Index (CPI), swelled to 10.09 per cent during the month, mainly on account of high food prices.

PTI