Manufacturing Sees Upturn on Rise in Output, Local Demand
Mfg PMI at 8-month high of 52.4 in March
New Delhi: Led by better domestic demand and increased output, India’s manufacturing business conditions improved in March, a private survey showed on Monday. At an eight-month high of 52.4 in March, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) pointed to a manufacturing upturn. A higher reading was registerd for the index in July 2015.
A reading above 50 on this survey-based index shows expansion, while a figure below that indicates contraction.
The manufacturing PMI rose to 52.4 in March from 51.1 over the previous two months. March data highlighted a third successive monthly rise in order books associated with improved demand from domestic and external clients. New business inflows increased at a solid pace and one that was the most pronounced since last July. “PMI data suggests we should expect another quarter of robust economic growth in the last quarter of the 201516 financial year," said Pollyanna De Lima, economist at Markit, the agency that compiles the index. The survey showed that along with improved domestic demand, producers also recorded an increase in new export business. On the price front, cost inflation accelerated, while charges were raised to the greatest extent since November 2014. These positive developments encouraged companies to buy more inputs, but workforce numbers were left broadly unchanged. Financial services firm Nomura said this rise is indicative of an improvement in underlying trend, primarily led by strengthening domestic order demand with consumer goods remaining the primary driver of growth.