India Manufacturing PMI hits 10-month high of 57.6 in November on strong demand

The Indian manufacturing sector continued to expand strongly in November, as an accelerated rise in sales supported the fastest upturn in production. The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) increased at 57.6 in November, which is a jump from 55.9 in October, signaling the strongest improvement in the health of the sector for 10 months, buoyed by a strong pick-up in demand. Moreover, the report said the headline figure was well above its long-run average of 53.6.

Factory orders rose for the fifth successive month and at a sharp pace that was the fastest since February. Underlying data suggested that the domestic market was the main source of sales growth, as new export orders rose at a slight pace that was weaker than in October. Meanwhile, the rate of purchase price inflation was little changed from October's recent high, owing to raw material supply-demand mismatches and rising transportation costs.

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. November data pointed to an improvement in hiring activity among goods producers. Although fractional overall, the latest expansion was only the second over the past 20 months.