India's manufacturing PMI jumps in November

India’s manufacturing output accelerated in November from the previous month, with a key private sector gauge touching its highest level since May this year. India's Purchasing Managers’ Index (PMI) for manufacturing stood at 58.4 in November from 57.2 in October, according to HSBC Holdings Plc and Markit Economics. A reading over 50 indicates expansion while anything below it denotes contraction. The previous highest reading in May was 59.0. With this, the widely followed manufacturing gauge has been above the 50 mark for the 20th consecutive month.



"The momentum in manufacturing picked up further in November. Output accelerated and growing order books point to a continued strong momentum in the months ahead," said Leif Eskesen, chief economist for India & ASEAN at HSBC. All but two sub-indexes showed expansion as manufacturers saw a big jump in overseas orders owing to some improvement in the global economic scenario.

The input price index surged to a six-month high of 62.5 from October's 60.9, mainly due to rising raw material costs, which will continue to drive up output prices as manufacturers pass the higher input costs to consumers. Substantial increase in new business, coupled with new order volumes sent the backlog of work to a near-series high, according to the survey. However, moderating inflation and slower industrial output growth might support the central bank's case for a pause before resuming the tightening move. Markets do not expect another hike until early next year.