Manufacturing activity expanded in November for the third month in a row, on the back of a growth in new orders and output, according to a private sector survey.
The Nikkei India Manufacturing Purchasing Managers’ Index registered a reading of 54 in November, the highest in 11 months, up from 53.1 in October. A reading above 50 denotes an expansion, while one below 50 implies a contraction.
“Manufacturing operating conditions in India strengthened for the third successive month in November, as healthier inflows of new orders encouraged companies to lift production and input buying to greater extents than in October,” the report said. “Cost inflation moderated, but the revival in demand translated into improved pricing power among producers who raised their charges at a quicker rate,” it added.
“Buoyed by stronger demand conditions and greater sales, manufacturers increased production at the second-quickest pace since October 2016,” the report added. “The rise was led by intermediate goods firms, although robust growth was also seen in the consumer and capital goods categories.”
New orders grew at the second-fastest rate in over two years, slower only than that seen in December 2017. The survey report found that companies said that marketing efforts bore fruit, while stronger demand too boosted sales.
The report also highlighted the fact that growth in total new orders was bolstered by greater sales to international markets and that growth of new export work quickened to the fastest in just under four years.
“The relatively weak demand environment seen earlier in the year showed signs of abating, with clients unfazed by another round of increases in output prices and placing more orders regardless,” Pollyanna De Lima, Principal Economist at IHS Markit and author of the report, said.
Ms De Lima added that the signs of rising confidence in the upturn were also provided by the trend for employment, which continued to grow at one of the quickest rates seen in six years.
