IHS Markit India Manufacturing PMI report: At 56.3, Indian manufacturing sector continues expansion in November

The Indian manufacturing sector has continued its sharp rate of expansion, albeit some loss in momentum in November, according to IHS Markit India Manufacturing PMI report released on Tuesday. 

The headline number was down from 58.9 in October to a three-month low. 

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India’s manufacturing growth remained strong in November, latest #PMI data suggest, with the index at 56.3 despite losing some traction from Oct. https://t.co/KYGOhrVJZD pic.twitter.com/MKEY4OJIWQ

— IHS Markit PMI™ (@IHSMarkitPMI) December 1, 2020

"The Indian manufacturing sector remained on the right path to recovery, with strong growth of new orders and output sustained during November,” Pollyanna De Lima, Economics Associate Director at IHS Markit, said, commenting on the latest survey results. 

"Although the softening of rates of expansion seen in the latest month does not represent a major setback, since these are down from over decade highs in October, a spike in COVID-19 cases and the possibility of associated restrictions could undermine the recovery,” De Lima said further. 

"For now, firms are projecting sustained demand growth in the near-term and responded to this by lifting input buying to increase their safety stocks,” the Economist said. 

All three broad areas of the manufacturing industry recorded expansion, with growth led by consumer goods which was the only sector to see a stronger rate of increase, the report said. 

Highlights of the report: 

• Input costs and output charges rose at accelerated rates that nevertheless remained below their respective long-run averages 
• Aggregate new orders rose at the slowest pace in three months. However, the upturn was sharp and stronger than any seen for eight years prior to September 
• Companies indicated that sales growth was underpinned by resilient demand, though curbed by the COVID-19 pandemic 
• New export orders increased markedly in November, with survey participants reporting strong demand for their goods from key export markets 
• On Employment Numbers: Coronavirus disease 2019 (COVID-19) restrictions caused a further drop in payroll numbers, the HIS Markit data said. 

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Although the slowest for three months, the rate of expansion in output was sharp and outpaced its long-run average. The loosening of COVID-19 restrictions combined with an improvement in market conditions and a pick-up in demand supported another increase in production.