Deciphering the Metrics: S&P Global India Manufacturing PMI Insights - November 2023

In November, the S&P Global India Manufacturing PMI rebounded from October's eight-month low of 55.5 to a robust 56.0, signalling a noteworthy acceleration in manufacturing activities. Despite trailing the second fiscal quarter average of 57.9, the index outpaced historical trends, underscoring a tangible improvement in operating conditions. An Index level above 50 is a sign of expansion whereas less than 50 is a sign of contraction in the economy.

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1. Inflation Metrics: A Statistical Respite

Amidst this surge, a notable statistical reprieve emerged on the inflationary front. While average purchasing costs increased, the rate of inflation moderated to the lowest in the current 40-month sequence of increases.

2.Export Dynamics:

November witnessed the 20th consecutive month of growth in new export orders, albeit at a slower pace. Despite the moderation, the data illuminates the sector's resilience in navigating global currents. Companies reported increased business from Africa, Asia, Europe, and the US.

3.Production Metrics

Bolstered by positive demand conditions and an improving input supply, Indian manufacturers escalated production volumes in November. The data affirms a sharp and above-trend expansion in output, mirroring the sector's confidence and strategic response to market signals.

4. Labour Dynamics: Quantifying Employment Surges

Quantifying the surge in employment, the data reveals that manufacturing employment in India surged for the eighth consecutive month. This surge, substantiated by anecdotal evidence, underscores the correlation between sustained demand, new orders, and robust recruitment within the manufacturing workforce.

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5. Supply Chain Resilience: Navigating Bottlenecks Quantitatively

Purchasing activity and input stocks witnessed a quantifiable uptick in November. However, the delicate dance of supply chains faced challenges, reflected in falling finished goods inventories. The majority reported no significant changes in delivery times, but the sector collectively signalled mild pressures on capacities, quantifying the intricacies of supply chain resilience.

6. Sentiment Analysis: Metrics Behind Optimism

Firms base this optimism on quantifiable factors such as robust demand, strategic marketing initiatives, and a surge in inquiries from new clients. However, a nuanced drop in overall positive sentiment, tied to rising inflation expectations, adds a layer of complexity that can be dissected and analysed.

Takeaway: November's S&P Global India Manufacturing PMI soared to 56.0, showcasing robust growth. Key data highlights include moderated inflation, sustained export resilience, and a quantifiable employment surge. Production and supply chain metrics affirm sector adaptability. While the outlook is positive, a nuanced dip in sentiment tied to rising inflation signals caution, underscoring the imperative for a precise, data-driven strategy moving forward.

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