Resilient demand and new orders increase India’s factory output for the fourth straight month. Indian economy continues to grow at a high pace amidst a global slowdown.
Indian manufacturing confounded expectations in April. S&P Global compiled the Manufacturing Purchasing Manager’s index for this month. It beat the expectation and increased from 56.4 in March to 57.2 last month. Surveys had shown a decline in manufacturing and the index was expected to fall in April to 55.8.
The production growth was spurred by better supply-chain conditions, milder price pressures, and renewal of demand. The analysis presented by Pollyanna De Lima of S&P Global shows that Indian manufacturing has a strong in-flow of new work and the sector has abundant opportunities this year to keep moving ahead. He pointed out that manufacturing capacities had expanded through job creation.
There was also an increase in foreign demand from Indian manufacturers.
There was also an increase reported in the input cost of raw products. However, higher demand enabled the manufacturers to pass the cost down to customers. This is a vital indicator that retail inflation is going to continue to be high this year.
RBI, India’s central bank has a mid-term inflation target of 4%. It is unlikely that the economy is going to meet this target. Inflation is expected to be 5.3% this fiscal year and 5% in the next.
