The HSBC India Manufacturing PMI for November 2024 fell to 56.5, revised downward from the initial estimate of 57.3 and lower than October's 57.5. Despite the decline, the PMI still signals solid growth in the sector, with manufacturers reporting significant improvements in new business and production. However, growth has been moderated by competition and price pressures.

Key Highlights from the PMI Report

1. Moderated Growth in Business and Production:
   The slower growth in new business and production reflects a cooling of demand, influenced by increased competition and rising price pressures. Nonetheless, the manufacturing sector continues to show resilience, maintaining a healthy growth rate despite these challenges.

2. Factory Employment Growth:
   Factory employment increased for the ninth consecutive month, signaling ongoing optimism among manufacturers. This trend highlights the sector's positive outlook and efforts to meet rising demand, although the pace of hiring has slowed slightly compared to earlier months.

3. Purchases and Input Costs:
   Manufacturers increased their purchases of inputs in November, though the growth was the weakest in nearly a year. Meanwhile, input cost inflation rose to its highest level since July, signaling upward pressure on raw material prices. However, input inflation remained below the long-term average.

4. Price Pressures and Vendor Performance:
   As input costs rose, manufacturers passed on some of the higher costs to customers, resulting in the largest increase in selling prices since October 2013. Despite these challenges, lead times for deliveries shortened, thanks to strong supplier relationships, and vendor performance improved slightly.

5. Outlook for 2025:
   Looking ahead, Indian manufacturers remain optimistic, buoyed by expectations of successful marketing campaigns, new product launches, capacity expansions, and strong demand forecasts for 2025. This optimism is reflected in the positive business sentiment, which remains high despite the short-term challenges.

Conclusion

The India Manufacturing PMI for November 2024 suggests slower growth compared to previous months, mainly due to rising competition and price pressures. Despite these challenges, the outlook remains positive for 2025, with strong expectations for demand and capacity expansion. The sector's resilience, along with ongoing employment growth and improvements in vendor performance, provides a solid foundation for future growth in India’s manufacturing industry.