SBI March index up at 58.5, best growth pace in 4 years

MANUFACTURING COMING GOOD?

NEW DELHI: The SBI Composite Index, which tracks manufacturing activity, has shown a significant uptick in output, both on a month-on-month and yearly basis, in March.

The monthly index stood at 58.5 in March, up from 47.6 in February 2015. This is the highest pace of growth in the last 48 months. The index stood at 52.6 in January.

Above 50 indicates growth over the previous period, while below 50 suggests contraction.

“Robust recovery in the month-on-month index may be attributed to seasonal factors as March sequential momentum is always higher,” SBI said in a research note.

The SBI Index measures two components of the manufacturing cycle on a scale of 0 to 100 — growth on a month-on-month Chugging on: Experts keeping an eye on other growth indicators composite index in March against 47.6 in Feb, the highest growth in 48 months Composite index for 12 months up to March, up from 53.5 in Feb and a 6-mth high

Key indicators of recovery going ahead Revival in auto sales

Rise in capital goods output Upturn in credit offtake to micro and small enterprises, real estate, nonbanking financial companies and construction sectors

basis as well as year-on-year basis.

Revival in auto sales and capital goods production among others indicate a possible sustainable recovery in the economic activity in coming months, the research note said.

“We believe that if February and March numbers reveal moderate growth as per our prognosis, then April numbers will be most crucial,” said Soumya Kanti Ghosh, chief economic adviser, SBI.