According to a recent business survey, factories in India experienced their fastest growth in nearly two years as escalating order books pushed manufacturers to speed up output. The HSBC Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, climbed to 53.3 in November from 51.6 in October, its highest since February 2013, and the thirteenth consecutive month of expansion in activity.
 
A Reuters poll had expected manufacturing activity to lose some steam and predicted the index would fall to 51.2. However, 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 from October's 53. The expansion in output encouraged manufacturers to add more jobs. The survey also showed companies passed on additional input costs to consumers at a faster pace, which could revive inflationary pressures after several months of slowing.

Factories in India experienced their fastest growth in nearly two years as escalating order books pushed manufacturers to speed up output.

"The pick-up in output prices could partly be signaling some revival in pricing power among businesses," said Pranjul Bhandari, chief India economist at HSBC. Economic growth slowed to 5.3 per cent in the three months to September, from 5.7 per cent in the previous quarter, but the Reserve Bank of India (RBI) is expected to stand pat on interest rates when it meets on Tuesday despite pressure from the government to lower borrowing costs. RBI's key lending rate is expected to remain unchanged at eight per cent until at least April.

By: DocMemory
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