Manufacturing operating conditions in India have improved for the thirteenth month in a row in November, supported by stronger growth of output and new work intakes, according to HSBC India Manufacturing PMI.

Foreign orders and buying activity also rose during the month, while employment remained broadly stable. However, a cautionary note was provided by survey data regarding input costs and output charges, as inflationary pressures intensified.

Rising from 51.6 to 53.3, the headline seasonally adjusted HSBC India Purchasing Managers' Index (PMI) - a composite indicator designed to give an accurate overview of manufacturing operating conditions - reached a 21-month peak in November.

The latest improvement in business conditions was solid overall and the thirteenth in consecutive months. Consumer goods was the best performing of the broad areas monitored.

Production rose in line with the headline index in November, as the rate of output growth picked up to the fastest since February 2013. Anecdotal evidence linked expansions in production to rising new work inflows. By sub-sector, the sharpest increase was registered in consumer goods.

November data reinforced reports of stronger-than expected demand, as new order growth accelerated to the quickest in 21 months. Consumer goods was again the best performing of the surveyed sub-sectors. Similarly, foreign orders received by Indian goods producers continued to rise strongly in November.

Survey respondents generally attributed growth to strengthening demand from key export clients. Input buying at Indian manufacturers increased in November, reflecting stronger order books and higher production requirements.

Subsequently, stocks of inputs expanded for the sixth month running, albeit at a modest pace overall. Post-production inventories also rose during the month, although the rate of inventory building was also marginal. In spite of accelerated expansions in output and new business, employment in the Indian manufacturing economy remained broadly unchanged in November.

That said, the respective index posted in line with the average observed so far this year. Stability in payroll numbers was signalled in each of the monitored subsectors apart from consumer goods, where job creation was reported.

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