Manufacturing activity loses pace in Nov, falls to three-month low: PMI

India worker factory

The higher manufacturing PMI in November from October was broadly based across firms of various size, with the manufacturing PMI for large, medium-sized enterprises and small enterprises rising to 53.0, 52.0, and 50.1 respectively, from 52.6, 50.6 and 49.4 over the same period, supported by a broader economic recovery from the pandemic.

Asian factories continued to recover steadily in November thanks to a boom in economic powerhouse China, private surveys showed on Tuesday, offering hope the region was shaking off the drag from the COVID-19 crisis.

Millions have already lost their jobs or suffered pay cuts since the pandemic started and manufacturing firms reduced headcount for the eighth month in a row, a streak not witnessed since the survey began in March 2005.

The Chinese National Bureau of Statistics will release the updated November Purchasing Management Index (PMI) figures today.

The robust headline PMI points to solid fourth-quarter growth, which analysts at Nomura expect to quicken to 5.7 per cent year-on-year, from 4.9 per cent in the third quarter, an impressive turnaround from the deep contraction earlier this year.

The officials said the recovery trend has become stronger, but the pace remains uneven among sectors.

The manufacturing PMI stood at 56.3, compared to 58.9 in October.

While all three broad areas of the manufacturing industry recorded expansion, consumer goods segment led the growth, the only sector to see a stronger rate of increase, the report said.

"The second wave of COVID-19 outside China has been further bolstering China's exports, but may also slightly delay the full recovery of China's services sector, as Beijing still needs to stay alert and maintain some social distancing measures".

"Companies noted that the pandemic was the key factor weighing on growth during November, with COVID-related uncertainty also restricting business confidence". Employment remained in contraction territory, however, with companies reportedly keeping the minimum possible number of workers as per government guidelines, Pollyanna further said. Meanwhile, the strongest rise in the input costs since August compelled many firms to increase selling prices in a matter of nine months, indicating overall inflation would remain above the Reserve Bank of India's (RBI) medium-term target of 2 per cent to 6 per cent.



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