India manufacturing growth jumps to 5-month high in Nov: HSBC PMI
"The manufacturing sector gained momentum thanks to a strong pick up in new orders, which lifted output growth," said Leif Eskesen, economist at HSBC.
The new export orders sub-index rose to a six-month high of 55.9 in November, giving thrust to overall orders and factory output, both of which expanded at their fastest pace since July.
While there is strong overseas demand for Indian goods, a looming fiscal crisis in the United States could put the brakes on exports if lawmakers fail to agree a fix, as happened between July and October 2011, when the U.S. last hit a legal debt ceiling.
The survey also showed both input and output prices rose sharply in November, after rising at a slower pace in October.
That could put renewed pressure on India's headline inflation rate which at 7.5 percent in October, is well above the Reserve Bank of India's commonly perceived comfort zone around 5 percent.
"Inflation picked up again as higher raw material prices increased input costs for firms and they had enough pricing power to pass these on to end consumers due to the firm demand conditions," Eskesen said.
The central bank has held interest rates steady since April, citing high price pressures, even as many other central banks around the world have cut rates.
It has, however, cut the cash reserve ratio
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