Manufacturing activity loses pace in Nov, falls to three-month low: PMI

While all three broad areas of the manufacturing industry recorded expansion, consumer goods segment led the growth, the only sector to see a stronger rate of increase

India’s manufacturing growth fell to a three-month low in November over fears of a fresh wave of the Covid-19 pandemic, which led to slow expansion in factory orders and exports, according to a private survey.
 
The IHS Markit India Manufacturing Purchasing Managers Index (PMI) fell from the decadal high of 58.9 seen in October to 56.3 in November.
 
“Companies noted that the pandemic was the key factor weighing on growth during November, with Covid-related uncertainty also restricting business confidence,” said Pollyanna De Lima, economics associate director at IHS Markit. The November PMI, however, indicated a sustained recovery in the sector, despite some slowing of momentum.
 
A reading above 50 points indicates expansion. The PMI is a month-over-month indicator, showing improvement over the previous month, and not over the previous year.

As such, activities in November could not keep pace with October, but that was still higher than pre-Covid activities. For instance, the index stood at 54.3 in February. In fact, the reading was below November 2020’s figure during the period between April 2013 and February 2020. After February, PMI showed contraction till August.
 
“The Indian manufacturing sector remained on the right path to recovery, with strong growth of new orders and output sustained during November,” De Lima said. The softening in November does not represent a major setback, as it was only lower than October’s figure, De Lima added. “A spike in Covid-19 cases and the possibility of associated restrictions could undermine the recovery.”