Manufacturing sector posted the biggest growth of last seven months in December, taking full advantage of the positive economic growth.
The Purchasing Managers’ Index of HSBC Holdings Plc and Market Economics went up to 55.6 during December, while the figure was 53 in November. India’s manufacturing sector is posting above 50 figures consistently for past nine months in running, which is indication enough that factory production is on the recovery path.
With exports rallying and government stimulus packages pushing up domestic demand for consumer goods, the increase in manufacturing growth is a natural outcome. A faster GDP growth can propel the trend further in the coming months. However, as the sector is showing signs of recovery and the economic atmosphere of the country is on the upswing, the stimulus measures introduced to counter the effect of recession may be withdrawn in a phased manner.
The December figures have allayed concerns that the sector is taking a turn for the worse. While domestic demand has been vital for the growth, the role of export is gaining ground in boosting up the factory output.
The latest data points to the fact that there has been significant increase in new business in the Indian manufacturing sector. Even though both internal demand and exports showed signs of increase, the domestic market continued to be the major contributor of new business in the sector.
With the economic growth expected to rise further in the current fiscal as well as in the next, things are definitely looking up for the Indian manufacturing sector.
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