Indian manufacturing sector on the right path to recovery
Published On: Tuesday, December 1, 2020 | By: Team KnowMyStock
"The Indian manufacturing sector remained on the right path to recovery, with strong growth of new orders and output sustained during November," Pollyanna De Lima, Economics Associate Director at IHS Markit, said. While all three broad areas of the manufacturing industry recorded expansion, the consumer goods segment led the growth, the only sector to see a stronger rate of increase, the report said. It is believed that the loosening of Covid-19 restrictions, combined with an improvement in market conditions and a pick-up in demand, supported another increase in production, it said. According to the PMI report based on a survey of 500 private sector companies, new export orders expanded at the quickest rate in one year.
The IHS Markit India Manufacturing Purchasing Managers Index (PMI) fell from over a decade high of 58.9 in October to a three-month low of 56.3 in November, indicating a sustained recovery in the production sector despite some slowdown in momentum.
But in November India’s manufacturing activity growth lost pace and fell to a three-month low mainly due to slow expansion in factory orders and exports, according to a survey.
The 50-point mark separates expansion from contraction. But it should be noted that the PMI is a month-over-month indicator, showing improvement over the previous month, and not over the previous year.
While the pandemic related restrictions caused a further drop in payroll numbers. input costs and output charges rose at accelerated rates that remained below their respective long-run averages.
The index of industrial production also swung back into the growth territory in September after a gap of six months, posting a small uptick led by a recovery in consumer goods, electricity, and mining sectors.
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