ZCZC
BCN-16
INDIA-ECONOMY-MANUFACTURING
India’s mfg sector activity growth inches up in Nov; but remains subdued
New Delhi, Dec 2, 2019 (BSS/PTI) – The country’s manufacturing sector
activity inched up in November, but the upturn remained subdued as growth
rates for new orders as well as production were modest, a monthly survey said
on Monday.
The IHS Markit India Manufacturing PMI rose to 51.2 in November from 50.6 in
October, when it had fallen to a two-year low, indicating only a slight
improvement in the health of the sector.
Although business conditions in the Indian manufacturing sector improved in
November, the rise, however, remained subdued compared to earlier this year
and the survey history, the study said.
This is the 28th consecutive month that the manufacturing PMI has remained
above the 50-point mark. In PMI parlance, a print above 50 means expansion,
while a score below that denotes contraction.
“After pulling back noticeably in October, manufacturing sector growth
displayed a welcoming acceleration in November. Still, rates of expansion in
factory orders, production and exports remained far away from those recorded
at the start of 2019, with subdued underlying demand largely blamed for
this,” said Pollyanna de Lima, Principal Economist at IHS Markit.
According to the survey, growth of manufacturing activity in November was
supported by the launch of new products and better demand, though restrained
by competitive pressures and unstable market conditions.
“Some level of uncertainty regarding the economy was evident by a subdued
degree of business optimism. Also, companies shed jobs for the first time in
over a year-and a-half and there was another round of reduction in input
buying,” Lima said.
Lima further noted that the weakness of these forward-looking indicators
suggest that firms are bracing themselves for challenging times ahead.
On the inflation front, there were only marginal increases in both input
costs and output charges in November.
MORE/HR/1355
ZCZC
BCN-17
INDIA-ECONOMY-MANUFACTURING 2 LAST New Delhi
“PMI data continued to show a lack of inflationary pressures in the sector
which, combined with slow economic growth, suggests that the RBI will likely
extend its accommodative policy stance and further reduce the benchmark
interest rate during December,” Lima said.
The Reserve Bank may cut interest rates for the sixth straight time on
December 5 to support growth that has continued to slip to more than six-year
low on slump in manufacturing, bankers and experts said.
The RBI has cut interest rates on every single occasion the monetary policy
committee (MPC) has met since Shaktikanta Das took over as the Governor in
last December.
In five reductions so far in 2019, interest rates have been lowered by a
total of 135 basis points over concerns that growth momentum is slowing down
and also to try to boost liquidity in the financial system.
GDP growth slowed sharply to a pace of 4.5 per cent in the July-September,
hit by a slump in manufacturing output. The pace of GDP growth has moderated
from the 5 per cent rate in April-June and 7 per cent in July-September
quarter of 2018.
BSS/PTI/HR/1400