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Manufacturing sector activity rose to a five-month high in March with a sharp rise in production and new orders. The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) rose to 52.5 in March, from 50.7 in February.
A reading above 50 indicates expansion and below that denotes a contraction.
“Incoming new orders expanded at a stronger pace, thereby leading to quicker increases in production and input purchasing. Moreover, firms hired additional employees to cope with greater workloads,” it said in a release on Monday. New orders rose at the fastest pace in five months and production expanded at the strongest rate since last October. Export orders also increased significantly. The survey said intermediate goods led the upturn.
Although both input costs and output charges rose further, inflation rates softened from those seen in February, it further said. In fact, 96 per cent of manufacturers kept selling prices unchanged to try and stimulate demand.
The data comes ahead of the Reserve Bank of India’s monetary policy review on April 6. The central bank in its last policy review had a maintained status quo on rates as it kept a watch on inflation.
Business confidence among manufacturers also improved in March, with almost 20 per cent of them expecting output levels at their units to be higher in a year.
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