Although the PMI remained comfortably above the neutral 50 level, indicating continued expansion, the latest reading points to a loss of momentum in factory activity, with growth in both sales and production the weakest since February.
The PMI release showed that new orders and output continued to rise, but at a slower pace amid challenging market conditions, delays in project starts and rising competition among firms. The softer increase in sales also weighed on operational decisions, leading to job creation slipping to a 21-month low, even as employment continued to expand overall.
Cost pressures eased further in November, offering relief to manufacturers. Input costs and output charges rose at softer rates, marking the slowest increase in input cost inflation in nine months and the weakest rise in selling prices in eight months, reflecting relatively muted inflationary pressures across the manufacturing sector.
Pranjul Bhandari, Chief India Economist at HSBC, said, “India’s final November PMI confirmed that US tariffs caused the manufacturing expansion to slow.”
She added, “The boost from the cuts in goods and services tax (GST) may be fading and it might be insufficient to offset the tariff headwind to demand.”
The new export orders PMI fell to a 13-month low, with new export orders rising at the weakest pace in over a year, even as international demand from regions such as Asia, Europe, Africa and the Middle East remained broadly supportive.
Commenting on this Bhandari said, “Business confidence, as indicated by expectations for future output, showed a big fall in November, potentially reflecting increasing concerns about the impact of tariffs.”
However, despite the slowdown, companies remained confident about a rise in output over the next 12 months, though positive sentiment fell to its lowest level in nearly three-and-a-half years, as concerns around an increasingly competitive landscape, including competition from international firms, weighed on outlook.
Overall, the December PMI print highlights a moderation in manufacturing growth, with weaker gains in sales, production and hiring, even as easing price pressures provided some cushion to the sector.
