HSBC Purchasing Managers' Index

The manufacturing sector is showing some signs of a turnaround. The latest PMI survey showed output was the fastest in five months boosted by new orders and exports. The HSBC Purchasing Managers’ index, which provides a snapshot of operating conditions in the manufacturing sector, posted 53.7 in November, up from 52.9 in October. The survey is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 500 manufacturing firms.
The manufacturing sector has been hit hard by high interest rates and input costs. Latest data for eight core industries showed the sector grew 6.5% in October compared to a 0.4% expansion in the same year-ago month. The core sector accounts for nearly 40% of the index for industrial production and any strength in the data augurs well for the factory output numbers. Industrial output fell 0.4% in September underlying the sluggishness in the sector, which has been impacted by delayed projects and slowdown in policy approvals.
According to monitored companies, an increase in order book volumes combined with a depletion of post-production inventories resulted in higher output, the survey showed.
Prices charged by manufacturers increased during November and 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.
The survey showed manufacturing companies in India increased their input buying during November, marking a 44-month sequence of expansion. The rise in quantity of purchases was solid and the fastest in five months as panelists forecast ongoing growth of production requirements.