Activity in the country’s manufacturing sector slowed to a three-month low in November due to slower orders on worries of a fresh surge in Covid-19 cases, but growth still remained strong despite losing some momentum.
Posting a reading of 56.3 in November, the IHS Markit India Manufacturing Purchasing Managers’ Index highlighted a strong improvement in business conditions. However, the November reading was down from 58.9 in October — which was the highest in more than a decade and propelled by a surge in demand as the economy opened for business after one of the strictest lockdowns imposed to prevent the spread of coronavirus.
The PMI survey is compiled by IHS Markit from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers. The 50-point mark separates expansion from contraction. Since April, PMI manufacturing has been below the 50-point mark for four consecutive months due to the impact of the lockdowns.
Latest data has shown that the Indian economy posted a sharp recovery in the July-September quarter, contracting by an annual 7.5%, narrower than the 23.9% posted in the June quarter, which bore the brunt of the lockdown. The data showed the manufacturing returning to positive territory after slumping 39.3% in the June quarter and the farm and electricity sectors also posting expansion.
Experts expect the manufacturing sector to sustain the recovery momentum in the months ahead as economic activity gathers strength.
The survey showed that all three areas of the manufacturing industry recorded expansion, with growth led by consumer goods which was the only sector to see a strong increase.