India’s Manufacturing Activity growth slowed in November as the HSBC Markit India Manufacturing Purchasing Managers Index (PMI), an important parameter to judge the growth of the manufacturing sector, dropped to 51 in November compared to 52 in the previous month of October. The HSBC India Manufacturing PMI index is calculated based on a survey of purchase managers from more than 500 manufacturing companies in India.
Any reading above 50 indicates growth; PMI index rate of 51 indicates slight growth in the manufacturing sector. This is definitely good for India as PMI index for China and Euro zone fell much lower than 50 mark, indicates steep contraction in Manufacturing activity in those regions.
The main reason behind this slower growth is high interest rate and lower export demand amid uncertain global growth outlook. Because of the same reason India’s last quarter GDP growth fell to 6.9% and October core sector growth fell to just 0.1%. India’s food inflation dropped to 8% recently. If it shows clear sign of moderation, then RBI will consider decreasing interest rate in order to boost economic and industrial growth in the coming months.