Rebound in demand led to a surge in manufacturing production growth during January 2020, a survey report said on Monday.

Accordingly, the headline seasonally adjusted IHS Markit India Manufacturing
PMI expanded at a faster pace in January as firms responded positively to a sharp improvement in demand by scaling-up production.

Consequently, the seasonally adjusted PMI reading rose to 52.7 in December to 55.3 in January, its highest level in just under eight years.

An index reading of above 50 indicates overall increase compared with the previous month, and below 50 the decrease.

Industry-wise, the survey report said that consumer goods sub-sector remained the brightest spot, although growth was sustained in intermediate goods and capital goods moved back into expansion.

"The rise in total sales was supported by strengthening demand from external markets, as noted by the fastest increase in new export orders since November 2018. Manufacturers particularly noted higher sales to clients in Asia, Europe and North America, with favourable exchange rates assisting the upturn," the report said.

"In response to the pick-up in demand, Indian goods producers scaled up production in January. Moreover, the rise was the strongest in over seven-and-a-half years, with the rate of expansion much higher than its long-run average."