Manufacturing activity in December remains strong as new orders rise

As manufacturers stepped up their production and new orders continued to come in, activity in the country’s manufacturing sector remained stable in December for the fifth consecutive month, a key survey has revealed.

The IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) was at 56.4 in December, a little higher than November’s reading of 56.3 and above the critical 50 threshold for the fifth month in a row. The 50-point mark separates expansion from contraction. The survey was compiled from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.

The Indian economy has staged a sharp recovery since the easing of lockdown as pent-up and festival demand got the engines of the crucial manufacturing sector roaring. After a record slump of 23.9 per cent in the June quarter, GDP contraction narrowed sharply to 7.5 per cent in the three months ended September and economists estimate it to return to positive territory in the third and fourth quarters.