Factory activity in November hit 3-month high as inflation cooled

BENGALURU: India’s Factory Operations expanded at its fastest pace in three months in November, a private survey showed on Thursday, signaling a recovery in demand despite worsening global economic conditions as input cost inflation eased. to a two-year low.
Consumer inflation in South Asia’s largest economy eased significantly in October to 6.77% from September’s five-month high of 7.41%, suggesting a likely moderate price increase. and bring some support to manufacturers.
The Manufacturing Purchasing Managers Indexcompiled by S&P Global, rose to 55.7 last month from 55.3 in October, marking the seventeenth consecutive month of manufacturing expansion across India.
The result was comfortably higher than the Reuters poll median forecast of 55.0 and the 50 split between growth and contraction.
“India production area Pollyanna De Lima, deputy chief economist at S&P Global Market Intelligence, said the performance continued well into November, alongside growing recession fears elsewhere and a deteriorating outlook for the global economy.
“It’s business as usual for commodity producers, who lifted production volumes to a three-month high amid impressive evidence of demand resilience.”
Strong demand, particularly for consumer and intermediate goods, and marketing activity pushed the new orders sub-index to a three-month high.
International demand increased for the eighth consecutive month and at a similar rate to October.
Input prices rose at the slowest pace in 26 months, providing relief to producers, while benefiting end consumers with selling prices rising at the slowest pace since February.
This led to an improvement in overall business confidence, with the yield sub-index futures at its highest level since February 2015.
Reflecting positive sentiment, employment grew at its fastest rate since January 2020 excluding October.
PMI data could bolster expectations of the Reserve Bank of India opting for smaller gains at next week’s meeting as the previous three consecutive 50-basis-point increases start to hit the economy. .
Economic growth in India slowed to 6.3% last quarter, much weaker than the 13.5% growth reported in the previous three months due to distortions caused by the pandemic lockdown. The cause of Covid-19 has subsided.


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