India’s manufacturing sector growth falls to 18-month low in December

India’s manufacturing sector growth fell to an 18-month low in December amid softer increase in factory orders and output, despite minimal inflation, a monthly survey said on Wednesday.

The HSBC India Manufacturing PMI survey, conducted by S&P Global, showed that there were softer, albeit sharp, increase in factory orders and output, while business confidence towards the year-ahead outlook strengthened.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) fell from 56 in November to an 18-month low of 54.9 in December.

In Purchasing Managers’ Index (PMI) parlance, a print above 50 means expansion while a score below 50 denotes contraction.

The HSBC India Manufacturing PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.

“India’s manufacturing sector continued to expand in December, although at a softer pace, following an uptick in the previous month. Growth of both output and new orders softened, but on the other hand, the future output index rose since November,” said Pranjul Bhandari, Chief India Economist at HSBC.

Despite a loss of growth momentum, the sector still expanded strongly in December.