India PMI February 2016


India: Manufacturing PMI stable, while the Services PMI falls in February

March 3, 2016

The manufacturing Purchasing Managers’ Index (PMI), elaborated by Nikkei and Markit, rested at January’s 51.1 in February. As a result, the PMI lies above the 50-threshold that separates expansion from contraction in business activity in the manufacturing sector.

According to Nikkei, February’s result came on the back of an acceleration in new business growth while production slowed. Meanwhile, employment was broadly unchanged. Markit analysts added that, “goods producers continue to benefit from lower crude oil prices in global markets, which put a brake on inflationary pressures. In light of these numbers, the RBI has scope to loosen monetary policy to spur the economy.”

Meanwhile, the Nikkei services PMI fell from January’s 54.3, which had marked a 19-month high, to 51.4. Despite the fall, the indicator rests in expansionary territory. According to Nikkei, output increased in four of the six broad sectors surveyed. In addition, new orders rose however at the weakest pace since November. Markit commented that, “demand Nikkei India Services PMI™ (with Composite PMI data) Growth of private sector output eases in February Page 2 of 4 conditions in the country appear to be weak, as indicated by lacklustre increases in new orders. Although PMI data still signal expansions in output and incoming new work, recent figures are considerably low by historical standards.“

FocusEconomics Consensus Forecast panelists see fixed investment rising 7.6% in FY 2016, which is up 0.1 percentage points from last month’s estimate. For FY 2017, the panel expects also fixed investment to increase 7.6%.


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India PMI Chart

India PMI February 2016

Note: Nikkei India Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: Nikkei and Markit.

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