BANGALORE (Reuters) - Indian factory activity expanded at its fastest pace in nearly two years in November as burgeoning order books led manufacturers to accelerate output, a business survey showed on Monday.
The HSBC Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, rose to 53.3 in November from 51.6 in October, its highest since February 2013, and the thirteenth consecutive month of expansion in activity.
A Reuters poll had expected manufacturing activity to lose some steam and predicted the index would fall to 51.2.
New orders were supported by strong domestic demand for consumer goods while foreign orders remained robust. The sub-index soared to a 21-month high of 56.2 from October's 53.0.
The expansion in output encouraged manufacturers to add more jobs.
The survey also showed companies passed on additional input costs to consumers at a faster pace, which could revive inflationary pressures after several months of slowing.
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"The pick-up in output prices could partly be signaling some revival in pricing power among businesses," said Pranjul Bhandari, chief India economist at HSBC.
Economic growth slowed to 5.3 percent in the three months to September, from 5.7 percent in the previous quarter, but the Reserve Bank of India is expected to stand pat on interest rates when it meets on Tuesday despite pressure from the government to lower borrowing costs.
The RBI's key lending rate is expected to remain unchanged at 8.0 percent until at least April.
(Reporting By Anu Bararia; Editing by Kim Coghill)