Activity in the country’s manufacturing sector rose at its fastest pace in 10 months on the back of rising new orders, led by robust domestic demand and strong increase in production & sales, highlighting a swift recovery in the key industrial sector. This augurs well for overall economic growth, a survey showed on Wednesday.
Increasing from 55.9 in October to 57.6 in November, the IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) signalled the strongest improvement in health of the sector in 10 months. Moreover, the headline figure was well above its long-run average of 53.6. The 50-point mark separates expansion from contraction.
Manufacturers said strengthening demand, improving market conditions and successful marketing boosted sales in November. Factory orders rose for the fifth month in a row and at a sharp pace — the fastest since February. The survey is compiled from responses to questionnaires sent to purchasing managers in a panel of about 400 manufacturers.
Since the lifting of curbs after the second Covid wave, the economy has scripted a robust recovery. The pickup in vaccination is expected to add to confidence and spur consumption and help overall growth. But the new virus variant has cast a shadow on overall global growth and added an element of uncertainty about the durability of global economic recovery.
“The fact that firms purchased additional inputs at a stronger rate amid efforts to restock, combined with recurring declines in inventories of finished goods and tentative signs of a pick-up in hiring activity, indicate that production volumes will likely expand further in the near-term,” said Pollyanna De Lima, economics associate director at IHS Markit.
