India's manufacturing output at five month high

Business

oi-Sunil

By Sunil Fernandes

Published: Monday, December 3, 2012, 10:58 [IST]

India's manufacturing sector showed activity increasing to the highest level in the last five months, with the seasonally adjusted HSBC Purchasing Managers' Index rising to 53.7 in November, up from 52.9 in October.

The latest reading indicated a further improvement in the health of the Indian manufacturing sector. "Output growth was signalled in the Indian goods-producing sector for the forty-fourth consecutive month. Furthermore, the rate of expansion was solid, and the fastest in five months. According to monitored companies, an increase in order book volumes combined with a depletion of post-production inventories resulted in higher output.," a press release from HSBC PMI states.

"New orders and export sales both increased at manufacturing companies in India during November. Rates of expansion were solid. Whereas order book volumes expanded at the fastest rate since June, growth in new export orders was the sharpest in five months. Demand was reportedly stronger in both domestic and international markets," the release adds

Job creation was recorded in the Indian manufacturing sector in November for the ninth successive month. "However, the pace of expansion was only slight. Meanwhile, the volume of work-in-hand (but not yet completed) increased amid reports of persistent powercuts.

There was also evidence of labour shortages at some units. Backlog accumulation has been recorded in each of the past four months."
In line with higher input costs, prices charged by manufacturers in India increased during November. Rates of inflation were robust, and faster than in October. Anecdotal evidence suggested that higher raw material and diesel costs led to the latest increase in input prices.

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