India’s Manufacturing sector continued to strengthen in December, with the IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) remaining firm amid easing of Covid-19 curbs. The seasonally adjusted IHS Markit Manufacturing PMI was at 56.4 in December, a tick higher than November’s reading of 56.3 and above the critical 50.0 threshold for the fifth straight month. In PMI , a score below 50 means contraction while the score of above 50 shows expansion.
Manufacturers stepped up input buying and production amid efforts of rebuilding their inventories following the business closures earlier this year. In April 2020, the Manufacturing PMI had plunged to 27.4 as against 51.8 in March 2020. It has been recovering since then. “The latest PMI results for the Indian manufacturing sector continued to point to an economy on the mend, as a supportive demand environment and firms’ efforts to rebuild safety stocks underpinned another sharp rise in production,” said Pollyanna De Lima, economics associate director at IHS.
Output growth ceased to a fourth- month low, but remained strong. Overall, the results are showing improvement in the business conditions with one area lagging behind that is Employment.