India’s Manufacturing Activity Rises Marginally In April
India’s manufacturing sector activity improved marginally in April, driven by a rise in new business orders amid favourable demand conditions and easing inflationary pressures.
The Nikkei India Manufacturing Purchasing Managers Index rose to 51.6 last month from 51 in March, according to a statement by IHS Markit, which compiles the index. A reading below 50 indicates contraction and a number above it signals expansion. This is the ninth consecutive month that the manufacturing PMI remained above the 50-point-mark.
Inflationary pressures moderated for the second month in a row, the statement said. Wholesale price index based inflation hit an eight-month low in March to 2.47 percent, as prices of food articles continued to decline. Retail inflation fell to 4.28 percent in March, slowing for the third straight month.
In its first bi-monthly monetary policy for 2018-19 last month, the Monetary Policy Committee had left the repo rate unchanged at 6 percent. The committee maintained status quo for the fourth consecutive time since August last year.
The Indian manufacturing economy started the quarter on a slightly stronger footing as growth picked up from March’s five-month low, buoyed by stronger demand conditions.Aashna Dodhia, Economist, IHS Markit
Consumer goods were again the bright spot, with output growth being the fastest among all the three market groups, she added. Meanwhile, investment goods was the weakest category as both production and new orders declined during April, the statement said.
Greater production requirements stimulated job-creation and encouraged companies to engage in input buying. The survey noted that business sentiment was at the strongest level since the implementation of the Goods and Services Tax in July 2017.
“Optimism reflected expectations that new business and demand conditions will improve over the coming 12 months,” it added.