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India's SMI rounds off strongest quarter on record

Staff writer ▼ | December 18, 2015
Up to 69.8 in December from 69.2 in November, the World Economics Headline Sales Managers' Index (SMI) for India.
Textile workers
Headline index   The strongest in the survey history
This is a composite indicator, designed to provide the most up-to-date monthly assessment of economic activity in the country – posted the highest reading on record. The average reading over the fourth quarter (69.1) was also the strongest in the survey history.

Behind the increase in the headline index were stronger rises in business confidence, product sales and staffing levels. Market growth remained solid while prices charged continued to decline although only marginally.

Sector data analysis for December shows that the headline Manufacturing SMI rose to 68.3, the fourth consecutive month that the index has increased. Meanwhile, the Services SMI rose for the fifth successive month to register 70.6.

These index values indicate quicker and balanced economic growth for both sectors across the country, with the service sector continuing to drive the overall economic expansion.

Sentiment regarding the short-term outlook for activity strengthened to the highest level since April. The Business Confidence Index posted 92.6 up from its November value, with expectations of further improvements in economic conditions and sales demand supporting optimism.

Survey's data also showed that the Market Growth Index, which reflects growth of the general marketplace in panellists' own industry sectors, was little-changed in December from its fast pace in the prior month.

Furthermore, the Product Sales Index, which represents sales made by panellists' own companies, rose for the fifth consecutive month to register the highest level on record. According to panellists, robust market conditions have led to stronger client demand.

Meanwhile, prices charged continued to decline in December, although only marginally. The Prices Charged Index posted below the 50.0 no-change mark for the ninth consecutive month with surveyed companies commenting on lower costs for oil & other commodities as the key factors for reduced selling prices.

Moreover, Indian companies signalled a further increase in job numbers in December. The Staffing Index registered 62.9, up from 62.3 in November, the fifth successive month of growth and the highest level since May 2014.