India’S Factory Growth: Manufacturing activity at 18-month low in December: Survey

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NEW DELHI: Manufacturing activity in the country slowed to an 18-month low in December as the rate of expansion of new orders softened, but overall, it remained robust and business confidence continued to stay strong for the months ahead, a survey showed on Wednesday.
HSBC’s India manufacturing purchasing managers index (PMI) slowed from 56 in November to an 18-month low of 54.9 in December but was indicative of a marked improvement in the sector’s health.The latest reading was above the long-run series trend but contributed to the lowest quarterly average (55.5) since the first quarter of fiscal year 2022-23. The 50-point mark separates expansion from contraction. The survey is compiled from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.
“India’s manufacturing sector continued to expand in December, although at a softer pace, following an uptick in the previous month. Growth of both output and new orders softened, but on the other hand, the future output index rose since November. Rates of increase in input and output prices were broadly unchanged,” said Pranjul Bhandari, chief India economist at HSBC.
New business gains, favourable market conditions, fairs and expositions collectively induced another sharp increase in manufacturing production during December, according to the panellists. But, the rate of expansion softened to the weakest since October 2022 even as it remained above its long-run average. Growth was reportedly curbed by fading demand for certain types of products.

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