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Suggesting an economic recovery, the HSBC report said India’s domestic market was the main source of new order gains even as export business grew only marginally and at a slower rate.
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.
The PMI reading of above 50 differentiates growth from contraction. Manufacturing production in Indian rose for the first time in seven months during November, says the HSBC report.
“Manufacturing activity picked up, led by a rise in new domestic orders which helped pull up output growth,” HSBC Chief Economist for India and Asean Leif Eskesen said.
The new orders sub-index rose to 51.9 last month, its highest since April.
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,” Eskesen said.
The Reserve Bank had hiked policy interest rates by 0.25 per cent each in September and October to bring down the high inflation.
Meanwhile, according to official data released last Friday, the second quarter GDP figure is also an indication of an economic recovery.
Indian economy grew by a higher-than-expected 4.8 per cent in the second quarter this fiscal.