Green shoots of recovery all round, but will trend sustain?

  • HT Correspondent, Hindustan Times, New Delhi
  • Updated: Dec 02, 2014 09:07 IST

Factory activity in the country expanded at its fastest pace in nearly two years in November, the monthly HSBC survey showed on Monday, as burgeoning order books led manufacturers to accelerate output.

The HSBC Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, rose to 53.3 in November from 51.6 in October, its highest since February 2013. This is the 13th consecutive month of expansion in activity.

PMI is a metric to measure industrial activity capturing output to sales. A reading above 50 indicates growth in factory output.

New orders were supported by strong domestic demand for consumer goods, while foreign orders remained robust. The sub-index soared to a 21-month high of 56.2 as compared to October's 53.0.

The survey also showed that companies passed on additional input costs to consumers at a faster pace, which could revive inflationary pressures after several months of slowing.

"The pick-up in output prices could partly be signalling some revival in pricing power among businesses," said Pranjul Bhandari, chief India economist at HSBC.

"There are mixed signals from the real economy and though manufacturing PMI has shown improvement, this cannot be taken as a sign of decisive recovery," DK Joshi, chief economist, Crisil told Hindustan Times.

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