Factory output grows for 4th straight month

The growth in India’s manufacturing activity showed improvement for the fourth consecutive month in April on the back of a sharp growth in new orders even as the pace of growth remained largely unchanged when compared to the previous month, a survey showed on Tuesday.

The Nikkei India Manufacturing Purchasing Managers Index in April stood at 52.5. A reading above 50 indicates expansion while a reading below 50 suggests contraction in manufacturing activities.

According to the survey participants, the strong momentum in manufacturing growth came largely on account of new business orders amidst improving demand conditions. Overall, the upturn in order books was the most pronounced since October 2016 while the new export orders rose for the third month in a row. Concurrently, output grew solidly, though growth in output softened slightly.

The survey also highlighted an improvement in employment conditions as firms added fresh manpower to meet additional production needs.

“Manufacturing jobs rose for the second consecutive month in April, which panellists related to a combination of greater production needs and expectations of a pick up in demand. Nonetheless, the pace of employment growth remained slight overall,” it noted.

Having recovered at the beginning of the year from December’s demonetisation-related contraction, growth of order books has gathered pace in subsequent months. “Scratching beneath the surface we can see that consumers were the key drivers of growth as consumer goods producers registered by far the steepest expansions in both production and new orders. The outlook appears encouraging too, with output expected to remain on an upward trajectory amid reports of planned capacity expansions, new product launches, aggressive marketing campaigns and an improving economic scenario,” said Pollyanna De Lima.