The growth of the activity of the manufacturing sector increases in November; but remain subdued
NEW DELHI: the country manufacturing sector activity It rose in November, but the recovery remained moderate, as the growth rates of new orders and production were modest, a monthly survey said on Monday. The IHS Markit India Manufacturing PMI increased to 51.2 in November from 50.6 in October, when it had fallen to a minimum of two years, indicating only a slight improvement in the health of the sector.
Although commercial conditions in India's manufacturing sector improved in November, the increase, however, remained moderate compared to earlier this year and the survey's history, according to the study.
This is the 28th consecutive month that the manufacturing PMI has remained above the 50-point mark. In the PMI language, an impression above 50 means expansion, while a score below that indicates contraction.
After remarkably receding in October, growth in the manufacturing sector showed a positive acceleration in November. However, the rates of expansion in factory orders, production and exports remained very far from those registered in early 2019, with a low underlying demand largely guilty of this, said Pollyanna de Lima, chief economist at IHS Markit.
According to the survey, the growth of manufacturing activity in november It was backed by the launch of new products and better demand, although restricted by competitive pressures and unstable market conditions.
A certain level of uncertainty regarding the economy was evident by a moderate degree of business optimism. In addition, companies abandoned their jobs for the first time in more than a year and a half and there was another round of reduction in the purchase of inputs, Lima said. .
Lima further noted that the weakness of these prospective indicators suggests that companies are preparing for difficult times ahead.
On the inflation front, there were only marginal increases in both input costs and exit charges in November.
PMI data continued to show a lack of inflationary pressures in the sector that, combined with slow economic growth, suggests that the RBI will likely extend its accommodative political stance and further reduce the reference interest rate during December, Lima said.
The Reserve Bank can reduce interest rates for the sixth consecutive time on December 5 to support the growth that has continued to decline to more than six years in the fall in manufacturing, bankers and experts said.
The RBI has reduced interest rates on each occasion that the monetary policy committee (MPC) has met since Shaktikanta Das took over as governor last December.
In five reductions so far in 2019, interest rates have been reduced by a total of 135 basis points because of the concern that the growth momentum is slowing and also to try to boost liquidity in the financial system.
GDP growth slowed sharply at a rate of 4.5 percent in July-September, affected by a fall in manufacturing production. The pace of GDP growth has moderated from the 5 percent rate in April-June and 7 percent in the July-September 2018 quarter.