India's Manufacturing PMI Slips to 56.5 in November

As per the survey, the final reading on Purchasing Managers’ Index (PMI), compiled by S&P Global, fell to 56.5, down from 57.5 in October. However, the November figure of 56.5, matched with the September's level, marking an 11-month low. An earlier flash PMI survey by HSBC had indicated a PMI of 57.6 for November, which was revised to 57.3 on Monday morning. However, the final data came in significantly below these estimates.Commenting on the survey, Pranjul Bhandari, chief India economist at HSBC said that India recorded a 56.5 manufacturing PMI in November, down slightly from the prior month, but still firmly within expansionary territory. "Strong broad-based international demand, evidenced by a four-month high in new export orders, fuelled the Indian manufacturing sector’s continued growth," Mr Bhandari said.

"At the same time, however, the rate of output expansion is decelerating due to intensifying price pressures. Input prices for a variety of intermediate goods —

including chemicals, cotton, leather, and rubber — rose in November, while output prices soared to an eleven-year high as rising input, labour, and

transportation costs were passed on to consumers," the economist added.

The recent government data, however, revealed that the country's economy fell significantly to 5.4 percent during July-September quarter, making it near a two year low and attributed to underperformance to mining and manufacturing sectors. Besides, the government also said that another reason for the downward economy is reduced consumption across the country.

However, the survey said that the index signaled an improvement in the overall health of the sector during the period. "The pace of growth remained above its long-run average. During the review period, goods producers experienced a weaker yet robust upturn in new business intakes. The growth was supported by favourable demand conditions but stymied by fierce competition and price pressures," it said.On iprice pressure, the survey also said that input cost inflation intensified midway through the third fiscal quarter, reaching its highest mark since July but remaining below its long-run average. Items such as chemicals, cotton, leather and rubber were reported as up in price. "Although price pressures curbed domestic sales to a certain extent, growth of new export orders gained momentum. The rate of expansion in international demand was the best seen for four months, with panellists reporting gains from Bangladesh, mainland China, Colombia, Iran, Italy, Japan, Nepal, UK & the US," it said.