Indian manufacturing output and sales expanded at the fastest rates in three months in November led by a stronger upturn in factory orders amid cooling inflation.
The seasonally adjusted S&P Global India Manufacturing Purchasing Managers' Index (PMI) rose to 55.7 in November from 55.3 in October, highlighting the strongest improvement in operating conditions for three months. The headline figure was also above its long-run average of 53.7.
A reading above 50 indicates an overall increase in output compared to the previous month.
"India's manufacturing sector continued to perform well in November, besides heightened recession fears elsewhere and a deteriorating outlook for the global economy. 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. New orders and exports expanded markedly in the latest month," says Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.
November data highlighted a 17th successive expansion in manufacturing production across India, as companies responded to ongoing increases in new work intakes, the survey says, adding that the upturn in output was sharp, above trend and the strongest since August.
Companies also reported a notable improvement in international demand for their goods, with new export orders expanding at the second-fastest pace since May, says the survey.
"Survey participants were also strongly confident in both the buoyancy of demand for their goods and their ability to further lift production in 2023. The level of positive sentiment recorded in November was the best in nearly eight years," says Lima.
Input cost inflation receded to the joint-weakest rate in 28 months, while charges rose at the slowest pace since February. "Companies were also aided by a substantial cooling of cost pressures in November, a factor that prompted them to purchase more inputs and add to their inventories," Lima adds.
New orders and production rose at quicker rates in the consumer and intermediate goods categories, with slowdowns registered at capital goods makers, says the survey.
"Companies readjusted operating capacities in line with a pick-up in sales. Employment rose solidly, and for the ninth month in a row," it adds.
Despite robust demand for inputs, the rate of cost inflation softened considerably in November. Firms reported higher prices for metals, paper and transportation but noted lower fees for other items, the survey shows.
Subdued cost pressures facilitated a slower increase in output prices. The rate of charge inflation eased to a nine-month low, and was only slight, as 92% of surveyed firms kept their fees unchanged from October.