"The Indian manufacturing economy showed signs of strengthening in February, with faster increases in output and new orders bolstering the PMI to reach a one-year peak. New export business also rose at a quicker clip. Up from 51.4 in the previous month to 52.5 in February, the headline HSBC India Purchasing Managers' Index signalled a solid and stronger improvement in business conditions across the country's goods-producing sector," an HSBC PMI release states.
"Production growth accelerated on the back of a stronger rise in incoming new work. The pace of output expansion was solid and the quickest in one year. New orders increased for the fourth month running and at the most pronounced rate since February 2013. Survey respondents commented on higher demand from both domestic and export clients. Indeed new work from abroad rose in the latest month, with the growth rate climbing to the highest since June last yea," the release further adds.
Commenting on the India Manufacturing PMI survey, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said:
"Manufacturing activity picked up further in February. New order flows have firmed, with the improvement in external demand and the reduction in macroeconomic uncertainty since last summer. This, in turn, has provided a lift to output growth. However, the recovery in activity is still likely to prove protracted given the lingering structural constraints. Moreover, underlying inflation pressures remain potent, which was evident from the jump in the input price component of the PMI survey. This will keep RBI hawkish and likely compel it to raise rates a bit further this year."
The reading perhaps is an indication that economic activity in the country may have bottomed out.