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Indian manufacturing activity falls to 55.5 in December

03 Jan 2022 Evaluate

Indian manufacturing activity fell in the month of December, but stayed above the 50 mark that separates growth from contraction. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - eased to 55.5 in December from November's ten-month high of 57.6.

The report further noted that companies continued with their stock-building initiatives, as evidenced by another robust upturn in buying levels. Business confidence strengthened, but sentiment was again dampened by concerns surrounding supply-chain disruptions, COVID-19 and inflationary pressures.

According to the report, spending trends were mixed, with employment falling fractionally in response to a lack of pressure on capacity, but firms purchasing additional inputs amid restocking efforts. Buying levels increased substantially in the latest month.

On the inflation front, the rate of inflation eased to a three-month low, but remained sharp and above its long-run average. Besides, output charges rose as some companies transferred higher cost burdens through to clients, but the overall rate of inflation was only slight and the weakest since October 2020.

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