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Manufacturing PMI slips to 25-month low in November at 50.3

01 Dec 2015 Evaluate

Showing a tepid manufacturing growth across India, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index fell for the fourth consecutive month, and came at a 25-month low of 50.3 in November compared to 50.7 in October. Although, it was the 25th month of expansion but the data showed slower increases in incoming new business and output, while subdued demand growth led firms to keep workforce numbers broadly unchanged. (A reading above 50 marks expansion of the sector, while a score below this level means contraction)

The survey respondents indicated that new business inflows rose in November, marking a 25-month sequence of expansion. Though, there were reports that growth of new work was hampered by subdued domestic demand and competitive pressures. Mirroring the trend for new orders, production increased at the softest pace in the current 25-month sequence of expansion.

Following a marginal increase in the prior month, manufacturing employment in India was broadly unchanged in November and companies kept payroll numbers largely unchanged, with employment index recording only fractionally above the no-change mark of 50.0.

The survey highlighted a marginal improvement in business conditions across the sector. Subsector data highlighted consumer goods as the best performing category, while operating conditions at intermediate goods companies deteriorated for the first time since December 2013.Also, the Inventory levels decreased during November. Stocks of purchases declined for the first time in one-and-a-half years, while the Input cost inflation accelerated to the strongest in six months during November. Meanwhile, input cost inflation accelerated to the strongest since May, whereas factory gate prices were raised at a weaker rate that was marginal overall.

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