JOIN USIn a shot in the arm for the government ahead of the week long ‘Make in India’ celebrations, the manufacturing activity in the country has returned to growth in the new year after a contraction in December.
The Nikkei Manufacturing Purchasing Managers’ Index (PMI), compiled by Markit, jumped to a four-month high of 51.1 in January after slumping to a 28-month low of 49.1 in December. The 50-mark demarcates contraction from expansion.
“The opening month of 2016 saw a rebound in new business – from both domestic and external clients – leading manufacturers in India to scale up output following a short-lived downturn recorded in December,” Pollyanna De Lima, Economist at Markit and author of the report said.
Though the trends in the growth rates are relatively weak in comparison with the long-run series averages, January's PMI data paints a brighter picture of the Indian economy, Lima said.
On inflation, the report said price pressure remained on the upside in January, with input costs and output charges both rising during the month.
The Commerce Ministry is organising “Make in India” from February 13 in Mumbai during which it is set to showcase the potential of design, innovation and sustainability across country's focus sectors.
Core sector growth
A government report, however, has painted a grim picture of growth in eight key infrastructure industries in December. It said the core sector growth has slowed down to 0.9 per cent in December 2015 from 3.2 per cent in the same month of previous year as production of crude oil, natural gas and steel sectors declined.
Production growth in coal, refinery products, cement and electricity generation too slowed down to 6.1 per cent, 2.1 per cent, 3.2 per cent and 2.7 per cent, respectively, from 7.5 per cent, 6.1 per cent, 3.8 per cent and 4.8 per cent in December 2014. The eight core sectors have nearly 38 per cent weight in the Index of Industrial Production, the data for which will be released in the middle of this month.