India Manufacturing Up at Fastest Pace in 8 Months

Feb. 1, 2012
Demand came from both domestic and foreign sources.

India's manufacturing sector in January hummed along at its fastest clip in eight months, fuelled by new order growth, according to the HSBC India Manufacturing Purchasing Managers' Index released on Feb. 1.

The Index, a key measure of factory production, registered 57.5 in January, up from 54.2 in December -- accelerating for the second straight month.

HSBC said the reading pointed to the strongest improvement in Indian business conditions since May 2011.

"Activity in the manufacturing sector rebounded again in January, led by higher demand from both domestic and foreign clients," said HSBC India chief economist Leif Eskesen.

"The rebound in growth kept backlogs of work growing and employment growth in positive territory," he added.

The news underscores government expectations of an upturn in India's economy after it slowed under the brunt of aggressive interest rate hikes to curb stubbornly high inflation.

The PMI data came a day after the government's top economic adviser, Kaushik Basu, said India's growth was at an "inflection point" with the economy poised to speed up in the coming fiscal year.

The government expects India's economy to grow by around 7% in the current fiscal year to March, down from 8.4% last year.

But a preliminary government forecast for next year projects Asia's third-largest economy will grow between 7.5% and 8%.

Copyright Agence France-Presse, 2012

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