Growth in manufacturing activity hit an 11-month high in November as new orders and output rose at a slower pace, according to purchasing managers’ index (PMI).
The PMI in November continued its northward climb for the third month, going up to 54 from 53.1 in October. A reading above 50 shows expansion in the sector. Overall, manufacturing conditions improved for the 16th consecutive month in November.
The boost in output came from a surge in new orders, that rose at the second-fastest rate in over two years, slower only than that seen in December 2017, the PMI report said. Companies suggested that marketing efforts bore fruit, while stronger demand too boosted sales. Intermediate goods makers also fronted the upturn. Growth of new export work quickened to the fastest in just under four years, as producers reportedly received bulk orders from clients in key export destinations.
Consequently, manufacturers increased production at the second quickest pace since October 2016. The rise was led by intermediate goods firms, although robust growth was also seen in the consumer and capital goods categories, according to the report.
The expansion in total new orders was supported by greater sales to international markets. Growth of new export work quickened to the fastest in just under four years, as producers reportedly received bulk orders from clients in key export destinations.
Firms continued to raise staff levels, even as recruitment slowed in November. The increase in employment softened slightly since October, but was among the fastest seen in six years, the report said.
Goods producers created jobs in November. The increase in employment softened slightly since October, but was nonetheless among the fastest in six years.
“Signs of rising confidence in the upturn were also provided by the trend for employment, which continued to grow at one of the quickest rates seen in six years. Supply-chain pressures remained weak, however, which supported a softer rise in input prices,” Pollyanna De Lima, principal economist at HIS Markit and author of the report, said.
On the price side, a smaller share of Indian manufacturers faced higher input costs in November. Exactly 7 per cent of companies noted greater expenses, citing higher chemical, energy, metal, plastic and textile prices. The remaining firms reported no change in input prices since October, the report stated.
Overall, cost inflation eased to a seven-month low in November. Despite this, firms hiked their charges, amid an improved demand environment.
China saw its manufacturing performance improve in November as a rise in domestic demand offset a contraction in foreign order.
In India, business sentiment improved from October’s 20-month low, with Indian manufacturers forecasting better market conditions in the coming 12 months.