India PMI November 2019

India: Private sector expands for the first time in three months in November

The composite Purchasing Managers’ Index (PMI) produced by IHS Markit increased to 52.7 in November, up from 49.6 in October and coming in above the 50-threshold that separates expansion from contraction in the private sector for the first time in three months.

The services PMI increased to 52.7 in November, up from 49.2 in October, as business activity rebounded. Moreover, incoming new work increased at the fastest pace in four months, partly due to an acceleration in new business growth from overseas. Accompanying the improved demand conditions in November was an increase in the amount of work businesses had pending for the second consecutive month. On the labor front, headcounts increased in November—likely to help catch up on the pending work—at the fastest pace in three months. Looking at prices, input inflation quickened to a 13-month high in November, while output charge inflation slowed to the weakest rate since July. On the outlook, confidence among service businesses rose to a three-month high in November.

On the manufacturing side, the PMI increased to 51.2 in November, up from 50.6 in October, primarily due to accelerated growth in production and new orders, although both remained modest. International sales were, however, downbeat and among the weakest recorded in the past year-and-a-half. Payroll numbers decreased in November for the first time in 20 months, partly due to subdued sales. In tandem with reduced headcounts, manufacturers cut back on input purchasing in November, representing the fourth such cut in as many months and leading to another drop in input stocks; holdings of finished goods also dropped in November. On prices, there were only marginal increases in input and output prices in November. Turning to the outlook, confidence among manufacturers improved slightly in November.

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