Operating conditions for manufacturing in India improved at the strongest rate in five years during December 2017, according to Nikkei India Manufacturing Purchasing Managers’ Index.
“At 54.7 in December, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) rose from 52.6 in November. This was consistent with the strongest improvement in the health of the sector since December 2012. Notably, the PMI reading was slightly stronger than the average (54.0) recorded since the inception of the survey in March 2005. At the broad market group level, growth was recorded across all three monitored categories (consumer, intermediate and investment),” the Nikkei statement said.
Commenting on the Nikkei India Manufacturing PMI data, Economist at IHS Markit, Aashna Dodhia, said: “The sector continues to face some turbulence as delayed customer payments contributed to greater volumes of outstanding work. On the price front, Goods and Services Tax (GST) continued to lead to greater raw material costs, with input cost inflation accelerating to the sharpest since April. As consumer spending recuperates, firms were restricted in their ability to pass on higher cost burdens to clients which further placed upward pressure on firms’ margins.”
“Challenges remain as the economy adjusts to recent shocks, but the overall upturn was robust compared to the trend observed for the survey history. This outlook was shared by the manufacturing community as sentiment picked up to the strongest in three months amid expected improvement in market conditions over the next 12 months,” Dodhia added.