Economic activity slows down! December PMI shows manufacturing growth eases despite price cuts

By: | Published: January 2, 2019 11:40 AM

Manufacturing PMI December data: Despite easing in December compared with November 2018, the manufacturing activity in the month ended on a higher note as companies continued to expand production and generate employment.

manufacturing sector, manufacturing industryUnder the Make in India initiative, the government aims to increase the share of the manufacturing sector to the gross domestic product (GDP) to 25 per cent by 2022.

Manufacturing PMI December data: The manufacturing sector activity in the country grew at a slower pace in the month of December from an 11-month high of 54.0 in November, despite factories reducing their prices, PMI data showed on Wednesday. The Nikkei India Manufacturing Purchasing Managers’ Index, which is compiled by IHS Markit, fell to 53.2 from 54 in November.

Despite easing in December compared with November 2018, the manufacturing activity in the month ended on a higher note as companies continued to expand production and generate employment, on the back of strong inflows of new business orders. The increase in production was also among the quickest seen in the year gone by.

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This is the 17th consecutive month that the manufacturing PMI remained above the mark of 50-point. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.

Orders flow in

In December, there was an increase in new orders at the second-fastest pace in the entire year. Export orders also grew for the 14th straight month. Also, buying activity expanded solidly, which was the strongest in 11 months.

Input cost

December data saw a notable slowdown in input cost inflation, the weakest in three years, giving factories enough room to cut their prices for the first time since July 2017.

Employment rises

During the month, employment continued to grow. However, the companies hinted a rising volume of work-in-hand. still signalled increased volumes of work-in-hand. Besides, the rise in employment generation was the slowest in four months, while backlogs were accumulated to the quickest extent since May.

 

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