Nikkei India Manufacturing PMI at 13-month high in Aug

The Dollar Business Bureau

Witnessing a strong improvement, the growth in manufacturing sector reached a high of 13-month in August encouraged by expansion in new works and acceleration in production and buying levels, a survey said.

Nikkei Manufacturing Purchasing Managers' Index (PMI) of India increased to 52.6 in the month of August against 51.8 in the previous month as the manufacturers in India enjoyed a strong progress in operating conditions in the past month. A reading of beyond 50 shows expansion.

The PMI jumped due to a sharp improvement in inflows of new business which increased at the fastest speed since December 2014.

The increase is led by consumer goods producers, however strong growth was also recorded in the capital and intermediate goods categories.

“Manufacturing PMI data show that the positive momentum seen at the beginning of the second semester has been carried over into August, with expansion rates for new works, buying levels and production accelerating further,” said Pollyanna De Lima, the report’s author and Economist at IHS Markit on Thursday.

In addition, the dynamics of the sector’s growth for the short-term are positive as firms are expected to continue their efforts for replenishing stocks, Lima said.

IHS Markit predicted a strong increase of 7.5 percent in real Gross Domestic product (GDP) during the financial year 2016-17, the author added.

As per the report, manufacturers pointed out that the domestic as well as foreign external markets had been the main sources of incoming new work and August also witnessed expansion in new export orders at the fastest rate in a year.