The Indian manufacturing sector recorded its strongest improvement in business conditions for 13 months, recording marked and accelerated increases in output and new orders.
Furthermore, manufacturing companies observed a renewed increase in new export orders during November. On the job front, greater production requirements led to the fastest rate of employment creation since September 2012. Meanwhile, there was a pick-up in inflationary pressures, with input costs increasing to the greatest extent since April.
At 52.6 in November, the Nikkei India Manufacturing Purchasing Managers’ Index ® (PMI®) rose from 50.3 in October. This indicated a substantial improvement of operating conditions in India’s manufacturing sector. At the broad market group level, growth in consumer and intermediate goods offset a marginal deterioration in investment goods category.
The upward movement in the headline index was driven by a marked increase in output. Furthermore, the rate of expansion quickened to the strongest since October 2016. A combination of higher order book volumes and a decrease in GST rates reportedly contributed to greater production. That said, the rate of growth remained weaker than the trend seen since the inception of the survey in March 2005.
Following the negligible decline in the prior month, new orders increased in November. Although weaker than the long-run average, the rate of growth accelerated to the fastest in 13 months. The only market groups category to not record a rise in new work was capital goods, as was the case with output.
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