India's manufacturing sector lost growth momentum in November, as a slower order flow and Covid-related restrictions impacted output.
The headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) fell after posting the strongest improvement in the health of the sector in over a decade during October.
It posted a three-month low reading of 56.3 in November down from 58.9 in October.
"Aggregate new orders rose at the slowest pace in three months," the Manufacturing PMI report said.
"However, the upturn was sharp and stronger than any seen for eight years prior to September. Companies indicated that sales growth was underpinned by resilient demand, though curbed by the Covid-19 pandemic."
In terms of exports, new orders increased markedly in November, with survey participants reporting strong demand for their goods from key export markets.
Nonetheless, the pace of expansion eased from October's recent high.
As per the report, quantity of raw material or input purchases rose at the slowest pace in three months, but one that was historically marked.
"The Indian manufacturing sector remained on the right path to recovery, with strong growth of new orders and output sustained during November," said Pollyanna De Lima, Economics Associate Director at IHS Markit.
"Although the softening of rates of expansion seen in the latest month does not represent a major setback, since these are down from over decade highs in October, a spike in Covid-19 cases and the possibility of associated restrictions could undermine the recovery."
"Companies noted that the pandemic was the key factor weighing on growth during November, with Covid related uncertainty also restricting business confidence."
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