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The domestic manufacturing sector saw a slowdown in November as the Purchasing Managers' Index (PMI) eased to 56.6, down from 59.2 in October, according to the manufacturing PMI data released by HSBC.
Although the latest reading remains comfortably above the neutral mark of 50.0 and the long-run average of 54.2, it marks the slowest improvement in operating conditions since February. The report also highlighted that the moderation was visible across several key indicators. Growth in new orders, output, purchasing activity and employment all expanded, but these increases were the slowest since February. It stated "Registering 56.6 in November, the seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index........Falling from 59.2 in October, however, the latest figure highlighted the slowest improvement in operating conditions since February" Importantly, new export orders rose at the weakest pace in over a year, signalling softening external demand. A softer rise in sales also restricted buying volumes and job creation, while overall sentiment towards future output slipped to its lowest level since mid-2022. Manufacturers adjusted their hiring and purchasing activity in response to the slowdown in new order growth, which saw its weakest upturn since February. It also mentioned that the employment continued to expand, but at the softest pace in the current 21-month period marking a notable cooling in labour market momentum. It stated "employment expanded at the softest pace in the current 21-month period of uninterrupted growth". Output followed a similar pattern, expanding at a sharp pace but still the weakest since February. While some companies reported that new business growth and efficiency gains supported their production levels, others said that subdued demand for certain products constrained output at their units. On the external front, the report stated that the firms indicated that international sales remained favourable, driven by higher orders from clients in Africa, Asia, Europe and the Middle East. However, the report noted a mild loss of overall growth momentum in export performance. Despite the slower growth, the report outlined that the companies remained confident about increasing output over the next 12 months. However, positive sentiment dropped to its lowest level in nearly three-and-a-half years. So, the data pointed out that the manufacturing sector continues to expand but at a noticeably softer pace, with weakening demand, slower exports and reduced job creation weighing on momentum. (ANI)
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