Signaling further improvement in the manufacturing sector, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI)-a composite single-figure indicator of manufacturing performance-rose to a five-months high in March owing to increase in production and new orders. The PMI stood at 52.5 in March 2017 compared to 50.7 in February 2017.
As per survey report, incoming new orders expanded at a stronger pace, thereby leading to quicker increase in production and input purchasing. Moreover, reversing the decline noted in February, manufacturing jobs rose in March as some firms hired additional employees in line with efforts to expand capacity. The report further said that even though both input costs and output charges rose further, inflation rates softened from those seen in February.
Further, the survey found that business confidence among manufacturers also improved in March, with almost one-fifth of panellists expecting output levels at their units to be higher in 12 months’ time. Forecasts of a pick-up in demand and the launch of new product lines were the main factors underpinning optimism.
Average input costs increased again, largely reflecting higher commodity prices. Indian manufacturers purchased greater quantities of inputs for use in the production process during March, with the latest upturn in buying levels the strongest in the current three-month sequence of expansion.