Output in India’s manufacturing sector increased in November 2022, as the seasonally adjusted S&P Global’s Purchasing Managers’ Index (PMI) reached 55.7, up from 55.3 in October, signalling the strongest improvement in operating conditions for three months, despite recession fears. India’s PMI in November was also above its long-run average of 53.7.
Manufacturing growth was boosted by demand resilience, as companies noted the quickest increase in new orders and production for three months, according to a survey by S&P Global.
A stronger upturn in factory orders helped drive the headline PMI higher in November. According to survey participants, demand strength, and successful marketing efforts boosted overall sales.
Companies also reported a notable improvement in international demand for their goods, with new export orders expanding at the second-fastest pace since May.
November 2022 data highlighted a seventeenth successive expansion in manufacturing production across India, as companies responded to ongoing increases in new work intakes. The upturn in output was sharp, above trend and the strongest since August.
New orders and production rose at quicker rates in the consumer goods category in November 2022, with slowdowns registered at capital goods makers.
Spending on inputs likewise increased midway through the third fiscal quarter of 2022, as firms strove to rebuild inventories and lift production to accommodate higher sales. Purchasing activity in November 2022 expanded markedly, and to a greater extent than in October.
Despite robust demand for inputs, the rate of cost inflation softened considerably in November. The latest rise was moderate, the joint-weakest in 28 months and well below its long-run average.
Subdued cost pressures facilitated a slower increase in output prices. The rate of charge inflation eased to a nine-month low, and was only slight, as the vast majority of panellists (92 percent) kept their fees unchanged from October.
There remained signs of capacity pressures among manufacturers, as seen by a further increase in outstanding business levels. That said, the rate of accumulation in November 2022 eased from October 2022 and was modest.
Suppliers to the Indian manufacturing sector were able to deliver inputs in a timely manner during November, as signalled by an improvement in vendor performance compared to October.
Finally, firms were confident that demand would remain strong in the coming 12 months. As a result, they foresee growth of production volumes. Sentiment improved to its highest level in close to eight years.
