More Stories

Informist, Monday, Dec. 2, 2024

 

--India Nov manufacturing PMI 56.5 vs 57.5 in Oct

 

NEW DELHI - India's manufacturing sector activity expanded at a slower pace in November than October, with the HSBC India Manufacturing Purchasing Managers' Index declining to 56.5 from 57.5, S&P Global said Monday. The final print for November is below the provisional estimate, with the flash PMI released on Nov. 22 having pegged last month's manufacturing index at 57.3.

 

At 56.5, the November manufacturing PMI print is the joint-lowest in 11 months, with a similar figure being reported for the months of January and September. The last time the manufacturing PMI was lower was in the last month of 2023, when it came in at 54.9. A PMI reading of more than 50 denotes expansion in activity from the previous month, while a print below 50 is indicative of contraction.

 

"...the rate of output expansion is decelerating due to intensifying price pressures. Input prices for a variety of intermediate goods--including chemicals, cotton, leather, and rubber--rose in November, while output prices soared to an eleven-year high as rising input, labour, and transportation costs were passed on to consumers," Pranjul Bhandari, chief India economist at HSBC, said in a statement.

 

Prices charged by Indian manufacturers to customers rose the most in November since October 2013, with S&P Global noting that input cost inflation last month rose to its highest since July, although it remained below its long-run average. The sharp increase in selling prices will be of a huge concern to the Reserve Bank of India, whose Monetary Policy Committee will meet later this week to take a call on interest rates.

 

In October, the MPC had voted to leave the repo rate unchanged at 6.50% for the 10th meeting in a row, even as it loosened its stance to neutral, with an eye on headline retail inflation, which was expected to rise sharply in September and October, data for which was released after the committee had met. While that did occur--CPI inflation in October stood at a 14-month high of 6.21%, having risen more than 250 basis points in the space of just two months on the back of an unfavourable base effect in September and higher food prices in October--economic activity has weakened visibly.

 

Friday, the statistics ministry said India's GDP growth slid to a seven-quarter low of 5.4% in Jul-Sept, sharply lower than economists' expectations of 6.5% and the RBI's own forecast of 7.0%. Even before the GDP data, high-frequency indicators were for weeks suggesting slowing down of growth momentum, although RBI Governor Shaktikanta Das had maintained that while the growth picture was mixed, the positives outweighed the negative.

 

The MPC will begin its meeting on Wednesday and its decision will be announced at 1000 IST on Friday.

 

The activity slowdown was seemingly reflected in the latest manufacturing PMI print, with S&P Global saying that the rise in new orders in November was the second-weakest in 11 months. However, growth of new export orders gained momentum and was the most in four months. Government data released on Nov. 14 showed India's merchandise exports in October rose 17.3% to a five-month high of $39.20 billion, with the year-on-year increase being the most in 28 months.

 

As new orders rose, jobs did too, with S&P Global saying the rate of job creation in November was "solid".  End

 

US$1 = INR 84.67

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Siddharth Upasani

Edited by Vandana Hingorani

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2024. All rights reserved.