India’s textile manufacturing sector experienced a slowdown in November, as indicated by the latest HSBC India Manufacturing Purchasing Managers’ Index (PMI). The PMI, compiled by S&P Global, slipped to 56.5 in November from 57.5 in October, marking an 11-month low.
Key Findings from the PMI:
- Weakened New Orders: The survey revealed a decline in new orders, with the rate of expansion being the second-weakest in the past 11 months. While favourable demand conditions supported growth, intense competition and rising prices posed significant challenges.
- Accelerated Price Pressure: Input costs, particularly for essential commodities like chemicals, cotton, leather, and rubber, surged to a 10-month high. To offset these rising costs, manufacturers were compelled to increase selling prices, the steepest hike since October 2013.
- Moderated Growth: November’s PMI indicated the slowest expansion rate in 2024, albeit still above the long-term average. Additionally, the trend of declining finished goods stocks, which had persisted since August 2017, came to an end.
- Persistent Job Creation: Despite a slight slowdown from the previous month, the textile manufacturing sector continued to add jobs in November, marking the ninth consecutive month of employment growth.
Implications for the Textile Industry:
The slowdown in the manufacturing sector, including the textile industry, could have significant implications for the overall economy. While job creation remains positive, the rising input costs and price pressures could erode profit margins and hinder future growth.
Industry experts suggest that the government could consider measures to alleviate inflationary pressures and support the sector’s competitiveness, such as streamlining regulatory processes, providing incentives for technology adoption, and fostering a conducive business environment.
The textile industry, a crucial contributor to India’s economy, will need to adapt to these evolving challenges and capitalize on emerging opportunities to sustain its growth trajectory.
