Manufacturing Conditions Continue To Improve: Nikkei India PMI

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Manufacturing business conditions in India continued to improve, with new orders, exports, output and purchasing activity all rising in February, the Nikkei India Manufacturing PMI, released by Markit has said.

However, a faster expansion in new business inflows failed to lift growth of output and workforce numbers were left broadly unchanged again.

Manufacturing Conditions Continue To Improve: Nikkei India PMI
"PMI data also highlighted a weaker rise in costs and the first reduction in selling prices since September 2015," the release stated.

Reflecting sustained growth of new work, Indian manufacturers raised their production volumes in February. "That said, the rate of expansion eased since January and was marginal overall. Incoming new work increased for the second straight month and at the quickest rate since last September.

According to survey members, underlying demand continued to improve. New business from abroad also rose, although February saw a loss of growth momentum.

Commenting on the Indian Manufacturing PMI survey data, Pollyanna De Lima, Economist at Markit and author of the report, said: "The Indian manufacturing economy edged further in the right direction during February, eking out modest gains in new orders and output.
However, these positive developments failed to feed through to the labour market and staffing numbers were left unchanged.

Although businesses saw a stronger rise in new work, data implied that this was partly driven by price reductions.

"Goods producers continue to benefit from lower crude oil prices in global markets, which put a brake on inflationary pressures. In light of these numbers, the RBI has scope to loosen monetary policy to spur the economy, " she said.

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