INFRA GROWTH SOARS TO 5-MTH HIGH

NEW DELHI: Output of India's eight major industries expanded exponentially in August by 4.9 per cent from a rise of 2.6 per cent during the previous month, official data showed on Tuesday.

The Index of Eight Core Industries (ECI), representing the output of major industrial sectors like coal, steel, cement and electricity, had risen by 3.1 per cent in the corresponding month of the previous year.

The ECI index carries 40.27 per cent weightage of the Index of Industrial Production (IIP) which is the macro-gauge for India's factory output.

"The combined Index of Eight Core Industries stands at 123.6 in August, 2017, which was 4.9 per cent higher compared to the index of August, 2016," the Ministry of Commerce & Industry said in the summary of the ECI for August.

"Its cumulative growth during April to August, 2017-18, was 3 per cent."

On a sector-specific basis, refinery production, which has the highest weightage of 28.03 per cent, grew by 2.4 per cent in August 2017 as compared with the corresponding month of last year.

Electricity generation, which has the second highest weightage of 19.85, rose by 10.3 per cent. Steel production, the third most important component with weightage of 17.92, increased by 3 per cent during the month under review, while coal mining, with a 10.33 weightage, rose by 15.3 per cent in August 2017. However, extraction of crude oil, which has an 8.98 weightage, slipped by 1.6 per cent during the month under consideration. On the other hand, the sub-index for natural gas output, with a weightage of 6.88, stood higher by 4.2 per cent. Conversely, cement produc- tion, which has a weightage of 5.37, decreased by 1.3 per cent in August 2017. Similarly, fertiliser manufacturing, which has the least weightage – of only 2.63 -- dipped by 0.7 per cent. NEW DELHI: Manufacturing activity in India expanded in September for the second month in a row, driven up by increase in output and new orders, even as their growth pace remained weak in the context of historical trend, a survey said on Tuesday.

The Nikkei India Manufacturing Purchasing Managers' Index (PMI) came in at 51.2 in September, little changed from its August reading, pointing to an ongoing recovery in business conditions, post GST launch. The figure was below the long-run trend of 54.1.

A reading above 50 denotes expansion and one below this mark means contraction.

"September data painted an encouraging picture as the sector continued to recover from the disruptions caused by the introduction of GST in July," said Aashna Dodhia, Economist at IHS Markit, and author of the report.

Dodhia further said: "Business confidence strengthened among manufacturers as they reportedly anticipate longterm benefits from recent government policies. This was confirmed as the sector experienced meaningful gains in employment."

On the back of more new work orders, Indian manufacturers raised their staffing levels at the fastest pace since October 2012.

On the prices front, the survey said that though cost pressure intensified during September, inflation remained weaker than the long-run trend.

The strengthening of the Indian rupee may put a squeeze on efforts to revive demand for Indian goods from export markets.

"The lingering effects of recent economic shocks continue to cast a shadow on economic growth as IHS Markit downgrades its real Gross Domestic Product growth forecast to 6.8 per cent for fiscal year 2017-18," Dodhia said, adding that "it will be interesting to see if India's new economic advisory council will bolster its path to recovery".

India's economic growth slipped to a three-year low of 5.7 per cent during April-june, underscoring the disruptions caused by uncertainty related to the Goods and Service Tax rollout amid slowdown in manufacturing activities. MUMBAI: A majority 77 per cent of the mid market enterprises (MMES) in the country are confident about the domestic economy and expect higher revenue growth compared to their global peers, says an HSBC study.

As per data compiled by the global financial service firm, there were around 115,000 MMES in India, in 2014, which employed a total of 53 million people and produced $350 billion of Gross Value Added (GVA).

"MMES (50 per cent) in India are less confident in the global economy compared to respondents overall (58 per cent), though they are more confident in their local economy (77 per cent vs. 69 per cent)," HSBC said in the study.

"Indian MMES report and expect slightly higher revenue growth compared to all respondents, but lag slightly when it comes to reported and forecast profit margins," it added.

Besides, more than half of such companies felt that the country provides good opportunities for entrepreneurs.

"About 61 per cent of Indian MMES consider themselves risk takers compared with a global average of 50 per cent," the study said.

Further, it found that more than half of the MMES in India forecast that technology investments would be a lower priority in the next three years.

The study covers MMES in 14 countries. The MMES are defined as companies with between 200 and 2,000 employees.

"MME firms make a huge contribution to their economies, and have the potential to deliver even greater growth if they considered going to new markets," HSBC Chief Executive of Global Commercial Banking Noel Quinn said.

"In an environment of lower growth, we must help these companies reap the benefits of international commerce, and just as importantly work to raise their profile as major economic contributors, and potentially influential government stake-holders," Quinn added.

HSBC has estimated that over 43 lakh MME companies across 14 countries covered by the study directly employed 208 million people equivalent to the population of Brazil and support $3.4 trillion in exports.

The firm said that if MMES boost their exports by just 1 per cent, they could add a combined $12.5 billion to their economic impact.

In India, about one-tenth of sales by Indian MMES were exported – the lowest export share amongst the 14 countries in the study – suggesting that the vast majority of the output is used to satisfy domestic demand, HSBC said.