India's manufacturing growth at seven-month high: survey
04 Jan 2010
The rate of growth in India's manufacturing sector rose for the first time in three months in December, while output showed the highest growth in seven months, as exports picked up and the government's stimulus measures boosted consumer spending.
The HSBC Holdings-Markit Economics Purchasing Managers' Index (PMI) stood at 55.6 last month compared with 53 in November, according to a report released today. That was the ninth monthly reading above 50, which indicates a gain in factory production.
This was the biggest gain since May, when the PMI stood at 55.7 - the highest in 2009. A reading above 50 means that manufacturing activity expanded during the month.
"Concerns that growth in India's manufacturing sector was taking a decisive turn for the worse should be allayed by this impressive release," said Robert Prior-Wandesforde, senior Asian economist at HSBC. "While the headline index didn't quite manage to hit a new cycle high, it wasn't far away at 55.6, buoyed by stronger gains in the output and orders components."
He added: "The rise in the new export orders index suggests that external demand is also playing an increasingly important role in driving output gains." The new orders index rose to 60.10, the highest for the year, from November's 54.60.
Recent economic data indicate the recovery is gaining traction. Exports rose 18.2 per cent in November to $13.2 billion (Rs61,605 crore), the first increase in 14 months, and industrial output growth accelerated to 10.3 per cent in October.
