Job-shed­ding by firms damp­ens man­u­fac­tur­ing re­cov­ery in Novem­ber

The Hindu Business Line - - FRONT PAGE -

Man­u­fac­tur­ing ac­tiv­ity saw a mod­est up­turn in Novem­ber, the IHS Markit In­dia Man­u­fac­tur­ing PMI sur­vey said on Mon­day.

Man­u­fac­tur­ing PMI rose to 51.2 in Novem­ber from 50.6 in Oc­to­ber, which was a two-year low.

Less op­ti­mistic

Although there was im­proved per­for­mance in Novem­ber on the back of new or­ders and in­creased out­put, fac­to­ries were less op­ti­mistic about the fu­ture, as they shed jobs for the first time since March 2018.

Anec­do­tal ev­i­dence sug­gests that growth was sup­ported by the launch of new prod­ucts and bet­ter de­mand, though re­strained by com­pet­i­tive pres­sures and un­sta­ble mar­ket con­di­tions.

This is the 28th con­sec­u­tive month that the man­u­fac­tur­ing PMI has re­mained above the 50point mark, which sep­a­rates ex­pan­sion from con­trac­tion.

The lat­est read­ing was be­low the sur­vey av­er­age (53.8) and in­di­cated only a slight im­prove­ment in the health of the sec­tor.

Chal­leng­ing times

Com­ment­ing on the lat­est sur­vey results, Pollyanna de Lima, Prin­ci­pal Econ­o­mist at IHS Markit, said: “Some level of un­cer­tainty re­gard­ing the econ­omy was ev­i­dent by a sub­dued de­gree of busi­ness op­ti­mism.

“Also, com­pa­nies shed jobs for the first time in over a yearand-a-half and there was an­other round of re­duc­tion in in­put buy­ing. The weak­ness of these for­ward-look­ing in­di­ca­tors sug­gests that firms are brac­ing them­selves for chal­leng­ing times ahead.”

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