Indian Manufacturing Sector Sees Growth Despite Challenges
In a recent report released by HSBC India, the country’s manufacturing sector has shown significant improvement in its health in November. Despite facing challenges such as price pressures and a slight dip in the Purchasing Managers’ Index (PMI) from the previous month, the sector continues to operate within expansionary territory.
According to the data, India recorded a 56.5 manufacturing PMI in November, showcasing the resilience of the industry. This growth can be attributed to the strong international demand, with new export orders reaching a four-month high. HSBC’s Chief India Economist, Pranjul Bhandari, emphasized the positive impact of this broad-based demand on the sector’s growth.
International Demand Fuels Indian Manufacturing Growth
The report highlights that the international demand played a crucial role in driving the growth of the Indian manufacturing sector. Countries like Bangladesh, mainland China, Colombia, Iran, Italy, Japan, Nepal, the UK, and the U.S. contributed to the robust expansion seen in November. This surge in demand led to Indian manufacturers scaling up their production to meet the requirements.
Job Creation and Input Stocks on the Rise
Despite facing challenges in domestic sales due to price pressures, Indian manufacturers managed to create jobs for the ninth consecutive month in November. The rate of job creation, although slightly lower than the previous month, remained solid. This growth in employment was attributed to hiring on both permanent and temporary bases, as reported by panel members.
Furthermore, manufacturers in India increased their purchasing of inputs for production processes and inventories, albeit at a slightly weaker pace. The increase in buying levels was sharp, indicating a positive outlook for the sector. Additionally, the improvement in vendor performance and shorter lead times contributed to the accumulation of input stocks above the long-run average.
Conclusion
The Indian manufacturing sector’s resilience and growth in the face of challenges underscore its importance in driving the country’s economy. With favorable demand conditions and a focus on international markets, Indian manufacturers are poised to continue their expansion and contribute to the overall growth of the sector.
