The SBI Composite Index showed a significant growth in output both in terms of month-on-month and yearly basis in March, while the monthly index illustrated robust growth of 58.5 in March 2015, from 47.6 in February 2015, the yearly SBI Composite Index for March 2015 inched up to 54.6 from 53.5 in February 2015, a 6-month high. SBI in its research note said that “Robust recovery in the month on month index may be attributed to seasonal factors as March sequential momentum is always higher.”
The research report said revival in automobile sales, capital goods and basic goods production and possible upturn in the credit offtake to micro and small corporates segment, real estate, NBFCs and construction sector highlights possible sustainable recovery in economic activity in coming months. It further added that manufacturing activity is getting robust with a positive growth for the third consecutive month since November 2014. The report said that IIP has averaged 3.2 per cent growth since November 2014 till January and if February and March numbers also reveal moderate growth as per our prognosis, then April numbers will be most crucial.
The Composite Index, an indicator for tracking India's manufacturing activity captures two components of the manufacturing cycle - month-on-month and year-on-year-growth on a scale of 0 to 100. Index above 50 implies growth over previous respective period and less than 50 will suggest a contraction over respective period. It has been developed on the basis of the SBI's internal loan portfolio, which mirrors the credit demand in the country, and other data sets available in public domain.
