Manufacturing sector growing in India
India’s factory activity flourished at its fastest pace in three months in November which signaled resilient demand despite deteriorating global economic conditions as input cost inflation fell to a two-year low.
Consumer inflation in South Asia’s largest economy relieved significantly in October to 6.77% from September’s five-month high of 7.41%, indicating price rises may moderate and providing some relief to manufacturers.
The Manufacturing Purchasing Managers’ Index grew to 55.7 last month compared with 55.3 in October, marking the seventeenth successive month of expansion in manufacturing production across India.
Factors behind growth of manufacturing:
It was business as usual for goods producers, who lifted production volumes to the greatest extent in three months amid impressive evidence of demand resilience.
Robust demand is also a factor behind growing manufacturing activities in the country
If we talk about particularly for consumer and intermediate goods, it has showed significant growth in this sector.
Marketing drove the new orders sub-index to a three-month high.
Global market demand:
International demand jumped for an eighth consecutive month and at a similar pace to October.
Input prices from various international markets grew at the slowest pace in 26 months providing some relief for manufacturers, and also benefiting end-consumers with selling prices increasing at the shallowest rate since February.
Effects due to growth:
As this results in an improvement in overall business confidence, with the future output sub-index at its highest since February 2015.
With the reflection on the positive sentiment, employment has growing at the quickest rate since January 2020 barring October.
Challenges to sudden growth:
The PMI data might be disappointing as the Reserve Bank of India to opt for a smaller hike at its meeting next week as the previous three consecutive 50 basis point increases start to impact the economy.
In previous economic growth in India decelerated to 6.3% last quarter, much weaker than the 13.5% growth reported in the previous three months as distortions caused by COVID-19 lockdowns faded.
Question & Answer:
Q1. Where the sudden growth has been seen despite deteriorating global economic conditions?
Ans. Indian Manufacturing Sector
Q2. Consumer inflation in South Asia’s largest economy i.e. India relieved significantly at what percent in October 2022?
Q3. The Manufacturing Purchasing Managers’ Index grew to _____ last month compared with 55.3 in October.