New Delhi: In November, India's manufacturing sector showcased its resilience despite facing challenges from price pressures and intense competition.
The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index™ (PMI) recorded a value of 56.5, a decrease from October's 57.5, reaching a joint 11-month low. Nevertheless, this figure remains significantly above the long-term average, indicating ongoing expansion within the sector.
The growth in sales and output was supported by a favorable demand trend. However, the competitive landscape and rising costs tempered the growth rate.
Input cost inflation, influenced by increased prices for chemicals, cotton, leather, and rubber, reached its highest point since July, prompting manufacturers to elevate output charges at the fastest rate since October 2013.
Pranjul Bhandari, Chief India Economist at HSBC, commented, "India's manufacturing PMI for November stands at 56.5, a slight decline from the previous month, yet still well within the expansion zone. Robust international demand, reflected in a four-month high for new export orders, has contributed to the sustained growth of the Indian manufacturing sector."
"Conversely, the pace of output growth is slowing due to rising price pressures. In November, input prices for various intermediate goods, including chemicals, cotton, leather, and rubber, increased, while output prices surged to an eleven-year high as the rising costs of inputs, labor, and transportation were transferred to consumers," he added.
Domestic sales growth encountered challenges due to inflationary pressures; however, international demand reached a four-month peak. Export orders experienced significant growth from countries such as Italy, the UK, Bangladesh, China, and the US, as Indian manufacturers took advantage of the global market.
The manufacturing sector continued to increase its workforce for the ninth month in a row. Although job creation softened compared to October, it remained strong, with employers hiring both permanent and temporary staff to meet production requirements.
At the same time, input purchasing remained robust, indicating manufacturers' efforts to build inventories in anticipation of future demand. While the pace of purchasing slowed to its lowest level in nearly a year, manufacturers benefited from enhanced supplier performance and reduced lead times.
