In a significant uptick for India’s manufacturing sector, the latest data from the monthly survey by S&P Global reveals a robust performance in November. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) climbed from October’s eight-month low of 55.5 to an impressive 56, indicating a noteworthy expansion in the industry.
One of the key contributors to this surge has been the substantial easing of price pressures, according to S&P Global. While average purchasing costs saw a slight increase, the rate of inflation witnessed a notable decline, reaching its lowest point in the current 40-month sequence of increases. This downturn in inflationary pressures, as described by Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, sets an optimistic tone for the manufacturing landscape.
De Lima pointed out that India’s manufacturing industry maintained its robust performance in November, with output regaining growth momentum. A pivotal factor contributing to the sector’s success has been firms’ ability to secure new business, both domestically and internationally. Sustained growth in new orders has had a positive impact on the labor market, with recruitment continuing on an upward trajectory.
The survey, conducted by S&P Global and based on responses from around 400 manufacturers, emphasizes that expanded capacities, rising workloads, and the necessity to replenish stocks of finished goods collectively indicate that India’s manufacturing economy is in good shape as 2023 comes to a close. Moreover, there are optimistic expectations for a continued strong performance in 2024.
Following a slowdown in October, the growth of output gained momentum in November. Strengthening client demand and more favorable input supply were attributed to this acceleration in production volumes. Inflationary pressures also saw a retreat, with purchase costs rising at the slowest pace since the sequence of increases began in August 2020. Charges rose modestly, as most firms chose to maintain their fees at the October levels.
De Lima acknowledged that prices for raw materials and components did experience an increase in November. However, improved availability at suppliers, coupled with subdued global demand for inputs, led to a considerable retreat in overall cost pressures. While some concerns over future price increases were reflected in the business sentiment data, there was also a softer uptick in output charges amid a reduced inflationary environment, according to S&P Global.
In conclusion, India’s manufacturing sector’s resilience, propelled by a combination of eased price pressures and heightened demand, paints a positive outlook as the year concludes. The industry’s ability to adapt to changing dynamics and the anticipation of continued strength in 2024 further solidify its position in the global market.