Manufacturing expands, core sector output contracts

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SME Times News Bureau | 03 Dec, 2013
India's manufacturing sector activity witnessed an expansion in November for the first time since July, driven by rising new domestic orders, an HSBC survey said on Monday.

The HSBC India Manufacturing Purchasing Managers' Index (PMI) for the manufacturing industry climbed from 49.6 in October to 51.3 in November on the back of a rebound in new orders and output.

This was the first manufacturing PMI reading above 50.0 since July and is the highest in seven months.

The PMI reading of above 50 differentiates growth from contraction.

In contrast, the output of eight core sector industries contracted by 0.6 per cent in October due to poor showing by coal, oil and gas sectors.

According to HSBC, inflationary pressures in the Indian manufacturing economy softened in November.

"Encouragingly, input and output price inflation eased, which, if sustained, could imply that the RBI is getting closer to the end of its tightening cycle, although it may still need to notch rates up a bit further," a ban official said.

Meanwhile, according to official data released last Friday, the second quarter GDP figure is also an indication of an economic recovery.

Exports contributed to this low deficit figures, with merchandise exports increasing by 11.9 percent to $81.2 billion in the second quarter of 2013-14 on the back of significant growth especially in the exports of textiles and textile products, leather and leather products and chemicals.