🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

India Nov factory activity hits 3-month high as inflation cools

Published 12/01/2022, 12:09 AM
Updated 12/01/2022, 12:10 AM
© Reuters. A worker grinds a metal window grill at a steel and iron manufacturing unit in Ahmedabad, India, October 3, 2016. REUTERS/Amit Dave/Files
SPGI
-

By Anant Chandak

BENGALURU (Reuters) - India's factory activity expanded at its fastest pace in three months in November, a private survey showed on Thursday, signalling resilient demand despite deteriorating global economic conditions as input cost inflation fell to a two-year low.

Consumer inflation in South Asia's largest economy eased significantly in October to 6.77% from September's five-month high of 7.41%, indicating price rises may moderate and providing some succour to manufacturers.

The Manufacturing Purchasing Managers' Index, compiled by S&P Global (NYSE:SPGI), rose to 55.7 last month compared with 55.3 in October, marking the seventeenth successive month of expansion in manufacturing production across India.

The reading was comfortably above a Reuters poll median forecast of 55.0 and the 50-level separating growth from contraction.

"India's manufacturing sector continued to perform well in November, besides heightened recession fears elsewhere and a deteriorating outlook for the global economy," said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.

"It was business as usual for goods producers, who lifted production volumes to the greatest extent in three months amid impressive evidence of demand resilience."

Robust demand, particularly for consumer and intermediate goods, and marketing pushed the new orders sub-index to a three-month high.

International demand rose for an eighth consecutive month and at a similar pace to October.

Input prices rose at the slowest pace in 26 months providing some relief for manufacturers, and also benefiting end-consumers with selling prices increasing at the shallowest rate since February.

This led to an improvement in overall business confidence, with the future output sub-index at its highest since February 2015.

Reflecting the positive sentiment, employment rose at the quickest rate since January 2020 barring October.

© Reuters. A worker grinds a metal window grill at a steel and iron manufacturing unit in Ahmedabad, India, October 3, 2016. REUTERS/Amit Dave/Files

The PMI data could harden expectations for the Reserve Bank of India to opt for a smaller hike at its meeting next week as the previous three consecutive 50 basis point increases start to impact the economy.

Economic growth in India slowed to 6.3% last quarter, much weaker than the 13.5% growth reported in the previous three months as distortions caused by COVID-19 lockdowns faded.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.