India's Manufacturing Activity Bounces Back in 2016

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India's manufacturing activity gained ground in Jan 2016, after showing dismal activity in Dec 2015.

"Alongside a resumption of output at some firms impacted by December's flooding, manufacturers also benefited from rising inflows of new business from domestic and export clients," a release by Markit and the Nikkei on India's manufacturing PMI stated.

India's Manufacturing Activity Bounces Back in 2016
At 51.1 in January, up from 49.1 in December, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index a composite single-figure indicator of manufacturing performance - moved back above the 50.0 mark.

Although the rate of expansion was only moderate, it was the sharpest signalled for four months. Commenting on the Indian Manufacturing PMI survey data, Pollyanna De Lima, Economist at Markit and author of the report, said: "The opening month of 2016 saw a rebound in new business-from both domestic and external clients-leading manufacturers in India to scale up output following a short-lived downturn recorded in December.

Whereas the trends in the growth rates are relatively weak in comparison with the long-run series averages, January's PMI data paint a brighter picture of the Indian economy.

"Although the RBI is likely to continue its monetary policy loosening cycle in 2016, February's meeting will probably see the repo rate remain unchanged at 6.75% as the central bank will remain wary of inflationary pressures building in the country."

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