Manufacturing PMI at 8-month high of 52.4 in March

NEW DELHI:India's manufacturing business conditions improved in March on the back of better domestic demand and increased output, a private survey showed on Monday.

At an eight-month high of 52.4 in March, the seasonally-adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) pointed to a manufacturing upturn.

A reading above 50 on this survey-based index shows expansion, while a figure below that indicates contraction.

The index was 51.1 in both January and February.

“PMI data suggest we should expect another quarter of robust economic growth in the last quarter of the 2015-16 financial year," said Pollyanna De Lima, economist at Markit, the agency that compiles the index.

The survey showed that along with improved domestic demand, producers also recorded an increase in new export business. On the price front, cost inflation accelerated, while charges were raised to the greatest extent since November 2014.

“In addition to the underlying growth picture, a lot of focus remains on the trend in prices. On this front, March’s survey suggests that inflationary pressures in manufacturing are on the upside… This build-up in inflationary pressures may lead the Reserve Bank of India to hold off from cutting rates, especially as solid growth was seen,” De Lima added.