New Delhi, Dec 1 : Healthy sales boosted the growth of India’s manufacturing industry in November, with the headline seasonally-adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) rising to 57.6 (index reading) in November as against 55.9 in October.
The headline figure was well above its long-run average of 53.6.The PMI ranges between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month.
As per the survey report, manufacturers stated that strengthening demand, improving market conditions and successful marketing boosted sales in November.
“The Indian manufacturing sector continued to expand strongly in November, as an accelerated rise in sales supported the fastest upturn in production for nine months,” the report said.
“Companies scaled up input buying, which in turn led to the second-quickest accumulation in stocks of purchases since data collection started nearly 17 years ago.”
On the price front, the latest results showed that cost inflationary pressures remained intense amid transportation issues and difficulties among suppliers to source raw materials.
Input prices increased at a rate that was broadly similar to October’s 92-month high.
IHS Markit’s Economics Associate Director Pollyanna De Lima said: “The Indian manufacturing industry continued to expand in November, with growth gathering pace and forward looking indices generally pointing to further improvements in the months to come.
“The fact that firms purchased additional inputs at a stronger rate amid efforts to restock, combined with recurring declines in inventories of finished goods and tentative signs of a pick-up in hiring activity, indicate that production volumes will likely expand further in the near term.”
The key threat to the outlook, in addition to potential new waves of Covid-19, is inflationary pressures, she said.
“For now, companies are absorbing most of the additional cost burdens and lifting output charges only moderately.Should raw material scarcity and shipping issues continue to feed through to purchasing prices, substantial increases in output charges could be seen and demand resilience would be tested.
“Businesses were indeed worried that inflationary pressures could hamper demand and production in the year ahead, as signalled by confidence weakening to the lowest in almost a year and a half.”
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