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Manufacturing sector grows in January: PMI
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SME Times News Bureau | 02 Feb, 2016
Country's manufacturing activity registered acceleration in January, Nikkei's Purchasing Managers Index (PMI) data showed on Monday.
As
per the monthly Purchasing Managers Index (PMI) survey conducted by
Nikkei and market intelligence firm Markit, India's PMI rose from 49.1
in December to 51.1 in January.
A reading below 50 in the PMI index indicates a contraction.
“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,”
Markit economist Pollyanna De Lima said in the PMI report.
“Whereas
the trends in the growth rates are relatively weak in comparison with
the long-run series averages, January’s PMI data paint a brighter
picture of the Indian economy,” De Lima said.
Rising inflows of
new business from domestic and export clients benefited manufacturers
along with the resumption of output of some firms which were impacted by
December floods.
Though PMI moved back above the 50-mark in
January, the rate of expansion was just moderate but signalled the
sharpest rise in the last four months.
Total new business and levels of production registered mild increases following contraction in December 2015.
In
the beginning of 2016, consumer goods sub-sector remained the principal
growth engine witnessing substantial expansions in new orders and
output, while investment goods producers experienced decline in new
orders and output.
In each of the past 28 months, incoming new
oversees orders have risen. The trend continued in the month under
review, with strengthened exports orders in January.
In addition,
last month saw employment increase in the Indian manufacturing sector
across consumer, intermediate and investment goods categories linking
expanded payroll numbers to rise in production requirements.
“However,
January’s increase in employment was insufficient to reduce the
pressure on manufacturers’ capacity,” the report noted.
For the last three months in a row, backlogs of work at factories further accumulated to reach the highest since March 2015.
Indications
of price pressures remained on the upside in January. Higher demand for
raw materials resulted in cost escalations with both input and output
charges rising in the month under review.
However, input cost eased slightly and remained below the long-run survey average.
Reaching a 14-month high, factory gate prices increased for the fourth successive month in January.
Respondents attributed the rise in charges as a way to pass on the increase in purchasing costs.
Due
to rise in the level of input buying activity, January witnessed a
modest rise in stocks of purchases and contrastingly inventories of
finished goods products again fell.
On the central bank’s
monetary policy, De Lima said: “Although the RBI (Reserve Bank of India)
is likely to continue its monetary policy loosening cycle in 2016."
"February’s
meeting will probably see the repo rate remain unchanged at 6.75
percent as the central bank will remain wary of inflationary pressures
building in the country.”
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
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64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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