Manufacturing activity expanded to a 14-month high of 54.3 in February, driven by increases in sales, output, and employment, according to a private sector survey.
The Nikkei India Manufacturing Purchasing Managers’ Index registered a strong reading of 53.9 in January as well. A reading over 50 denotes an expansion in activity and one below 50 shows a contraction.
“The health of the Indian manufacturing sector strengthened further in February, with a sharp and accelerated increase in sales, boosting growth of output and employment,” the report said. “At 54.3 in February, up from 53.9 in January, the Nikkei India Manufacturing Purchasing Managers’ Index reached a 14-month high.
“The latest figure was consistent with a robust improvement in business conditions that was stronger than seen on average over the 14-year survey history,” the report added.
New work orders
The report said that supportive government policies and strengthening demand conditions resulted in an expansion in the inflow of new work orders. The increase, it said, was the sixteenth in as many months and the most pronounced since October 2016.
“The Indian manufacturing sector made further progress midway through the final quarter of FY18, building on the accelerated upturn noted in January,” Pollyanna De Lima, principal economist at IHS Markit and author of the report, said. “Sharper growth in production and sales were matched by the establishment of new jobs,” she added.
“The upturn in employment was one of the best seen for six-and-a-half years, as goods producers sought to expand output capacities to meet strengthening demand from both domestic and external sources,” Ms. De Lima added.