Manufacturing Sector Growth Slumps to 25-Month Low in November

This also marks the fourth consecutive month of decline in the rate of Indian manufacturing output growth. (Photo: Reuters)

The manufacturing sector grew at its slowest pace in 25 months in November on sluggish pace of new business orders, a monthly survey showed today, strengthening the case for the RBI to keep the interest rates low.

This also marks the fourth consecutive month of decline in the rate of Indian manufacturing output growth, as per the monthly Purchasing Managers’ Index (PMI) survey conducted by Markit and Nikkei India.

“The health of India’s manufacturing economy improved for the 25th successive month in November, although to the least extent in this sequence.

“The latest PMI data showed slower increases in incoming new business and output, while subdued demand growth led firms to keep workforce numbers broadly unchanged,” as per the survey.

The input cost inflation at the same time accelerated to the strongest since May, whereas factory gate prices were raised at a weaker rate that was marginal overall.

PMI fell to a 25-month low of 50.3 in November, from 50.7 in October. A reading above 50 marks expansion of the sector, while a score below this level means contraction.

Among sub-sectors, consumer goods was the best performing category, while operating conditions at intermediate goods companies deteriorated for the first time since December 2013.