India’s Manufacturing PMI Slips to Three-month Low in November

 

India’s manufacturing sector activity declined in November and fell to a three-month low in November amid slow growth in factory orders, exports and procurement levels. The seasonally adjusted IHS Market India Manufacturing Purchasing Managers’ Index (PMI) fell from 58.9 in October to a three-month low of 56.3 in November, indicating that manufacturing sector growth remained strong despite losing traction.

In PMI parlance, a print above 50 means expansion, while a score below indicates contraction. “Indian manufacturing sector is on the right path of recovery, with new orders and production strengthening during November,” said Paulina de Lima, IHS Markets’ associate director of economics.

Lima further noted that “the softening in expansion rates seen in the latest month does not represent a major setback, as they are below a decade high in October, in a spike. COVID-19 The possibility of cases and associated sanctions may undermine recovery ”. According to the survey, new orders grew at the slowest pace in three months.

Companies indicated that the increase in sales was underestimated demand, although it was curbed COVID-19 Epidemic, it went. “Companies have noted that the epidemic was the major growth factor during November, with uncertainty related to COVID also limiting business confidence,” Lima said.

Business optimism faded slightly in November. β€œOutput growth is still projected for the year, but public policies, depreciation of the rupee and the COVID-19 According to the survey, the epidemic lost confidence. On the other hand, employment again plummeted as companies followed social distance guidelines. The rate of job shedding was solid and slightly changed since October.

Lima said, “Although employment remained in the area of ​​contraction, companies took into account the minimum number of workers according to government guidelines.” On the price front, input costs and output charges have risen at accelerated rates which nevertheless remain below their respective long-term averages.

Meanwhile, India’s economy improved faster than expected in the September quarter as pick-ups in the manufacturing sector helped narrow the GDP clock by 7.5 percent. Gross domestic product (GDP) declined by a record 23.9 percent in the first quarter of the fiscal year 2020-21 (April 2020 to March 2021). Coronavirus The lockdown encouraged economic activity.

The second straight quarter of contraction pushed India towards its first technical slowdown.

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