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Manufacturing economy rebounds in India

Staff Writer | February 2, 2017
Indian manufacturing output increased during January on the back of rising order books.
Manufacturing India
India   Nikkei India Manufacturing PMI
Greater production needs encouraged companies to purchase more inputs, but failed to generate jobs in the sector.

On the price front, input cost inflation climbed to its highest mark since August 2014, while output charges were raised for the eleventh successive month.

Having deteriorated in December for the first time in one year, the health of India’s manufacturing economy improved in the opening month of 2017.

The headline Nikkei India Manufacturing Purchasing Managers’ IndexTM (PMI) TM was up from 49.6 to 50.4 in January. The main factors contributing to the above-50.0 PMI reading were growth of both new orders and output.

Rates of expansion were only slight, but reversed the contractions noted in December. Anecdotal evidence highlighted a return to normal market conditions and a subsequent improvement in demand.

In contrast to the upturn in total new business, new export orders fell again. Having eased since the previous month, the rate of reduction was marginal.

Intermediate goods was the bright spot in January, with rates of expansion in both new work and production outstripping those seen in the consumer goods sector.

Meanwhile, investment goods dipped into contraction. Survey data pointed to an increasing degree of pressure on the capacity of manufacturers’ operations as backlogs rose at a quicker rate than in December. In spite of this, companies.