After a long time, positive news comes in for India’s manufacturing sector as its activity reached an 8-year high in January 2020. The IHS Markit India Manufacturing PMI rose from 52.7 in December 2019 to 55.3 in January 2020.
Crux of the Matter
A survey conducted says that it is due to the sharp rise in new business orders amid a rebound in demand conditions that led to the rise in production and hiring activity.
Pollyanna de Lima, Principal Economist at IHS Markit said, “Manufacturing sector growth in India continued to strengthen in January, with operating conditions improving at a pace not seen in close to eight years.”
It is the 30th consecutive month that the manufacturing PMI has remained above the 50-point mark. Point above 50 means expansion whereas below that denotes contraction.
The fastest increase in new export orders was recorded since November 2018 as the rise in total sales was supported by strengthening demand from external markets.
Hiring activity also improved in January as firms employed at the fastest rate in nearly 7.5 years.
The survey also showed that there was a slow increase in both input costs and output charges. This survey and other positive forecasts have given hope and optimism in the manufacturing industry.
Curiopedia
Purchasing Managers’ Indexes (PMI) are economic indicators derived from monthly surveys of private sector companies. The three principal producers of PMIs are the Institute for Supply Management (ISM) the Singapore Institute of Purchasing and Materials Management (SIPMM) and the Markit Group.PMI surveys on a monthly basis by polling businesses that represent the makeup of the respective business sector. ISM’s surveys cover all NAICS categories. SIPMM survey covers all manufacturing sectors. The Markit survey covers private sector companies, but not the public sector. More Info
IHS Markit Ltd is a London–based global information provider formed in 2016 with the merger of IHS Inc. and Markit Ltd. One part of this conglomerate originally was a firm that assigns IMO identification numbers for ships, companies and registered owners. It has since grown to incorporate other companies in the information services sector, many dating back to the late 1700s and 1800s. With more than 1400 employees its revenue as of 2017 stands at US$3.6 billion. More Info
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