Mumbai: The growth of India's manufacturing economy dropped to its lowest in the past 25 months, mainly on account of a slower expansion of new business and overall output, according to a leading global business survey released on Tuesday.
The Nikkei India Manufacturing Purchasing Managers' Index (PMI) showed a further fall at 50.3 in November, falling for the fourth consecutive survey period. The rise in the index of more than 50 indicates economic expansion. The index was at 50.7 in October.
"The November PMI data point to tepid manufacturing growth across India, with gloomy domestic demand resulting in the weakest expansion in production for 25 months," said the report's author and economist Pollyanna De Lima.
The survey highlighted marginal improvement in business conditions across sectors as consumer goods performed the best. But the conditions for intermediate goods companies deteriorated for the first time in two years.
"Digging deeper into detail, intermediate goods sub-sector drove the deceleration in growth. New business inflows and output in this category fell for the first time since December 2013. While investment goods producers saw a rebound in November, the consumer goods sector remained the bright spot," said De Lima.
In the analysed month, companies paid higher prices for metal, textiles and food while rate of inflation was only marginal, the report added.
"The slowdown in growth combined with weak inflationary pressures support further rate cuts. Input cost and output charge inflation as measured by the survey were much lower than their respective long-run averages," added De Lima.
Under the PMI, the manufacturing sector is divided into eight broad categories of basic metals, chemicals and plastics, electrical and optical, food and drink, mechanical engineering, textiles and clothing, timber and paper and transport.