According to the survey by data analytics firm IHS Markit, the manufacturing Purchasing Managers’ Index (PMI) for India shot up in December to a joint fastest rate along with March at 52.7, evidence that the Indian economy may have bottomed out. The reading was 51.2 in November. A figure above 50 indicates expansion. Anything lower signals contraction.
With improvements in a number of leading indicators, including GST collection, core sector industries, auto sales and non-oil merchandise exports, experts expect factory output to report modest growth in November after having contracted since September.
“Following a subdued start to the third quarter of fiscal year 2019/20, the Indian manufacturing industry took a significant step forward during December. With new orders rising at the fastest pace since July, companies ramped up production and resumed hiring efforts. There was also a renewed upturn in input buying," the firm said.
Four of the five sub-components of the PMI increased in December, while suppliers’ delivery times remained unchanged from the preceding survey period of November. At the sub-sector level, growth was led by consumer goods, though intermediate goods also made a stronger contribution to the headline figure. Meanwhile, capital goods remained in contraction.
The uptick in total sales was supported by higher demand from overseas. New export orders expanded for the twenty-sixth month in a row, albeit modestly.