Export demand pushes manufacturing production higher: PMI
Mumbai, March 1 (IANS) India’s manufacturing production increased last month as a rebound in export demand contributed to a stronger expansion of total new orders, a key macro-economic data showed on Wednesday.
The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) — a composite indicator of manufacturing performance — rose to 50.7 in February from 50.4 reported in January.
An index reading of above 50 indicates an overall increase in economic activity and below 50 an overall decrease.
However, February’s index reading was much weaker than the long-run series average of 54.2, largely reflecting below-trend rates of growth for output and new businesses.
“Indian manufacturers benefited from recovering demand and raised production volumes in response to another expansion in inflows of new work,” said Pollyanna De Lima, Economist at IHS Markit.
“February is the second month in succession in which the health of the sector improved after the demonetisation-related contraction recorded at the end of 2016.”
“However, with growth rates well below-par, the sector still has many areas to develop before it can fire on all cylinders. Businesses don’t yet seem convinced as to the sustainability of the rebound as highlighted by cuts to payroll numbers and destocking initiatives.”
The PMI report showed that an increased new order intakes contributed to a further rise in outstanding business.
The rate of backlog accumulation was the fastest since October last year.
In terms of employment, the macro-data disclosed a decline, though the rate of job losses was marginal overall.