India PMI

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India: Manufacturing PMI indicates acceleration in the sector while services slow

January 6, 2015

The HSBC manufacturing Purchasing Managers’ Index (PMI) rose to 54.5 in December from 53.3 in November. December’s result marked the highest point in two years and rose further above the 50-threshold that separates expansion from contraction in business activity in the manufacturing sector, indicating that activity is accelerating.

HSBC noted that, “accelerated growth of the manufacturing sector was reflected by faster expansion in output, new business and foreign orders.” HSBC also pointed out that, “[l]atest data also painted a brighter picture in terms of prices, as inflationary pressures eased during the month.” Contrasting the more positive picture and despite the increase in production and incoming new work, staffing levels decreased for the third consecutive month in December.

Meanwhile, the services PMI fell from November’s 52.6 to 51.1 in December, indicating that business activity in services continues to expand, although at a slower rhythm. According to HSBC, the drop in December stemmed from a contraction in financial intermediation services and a slowdown in new business.

FocusEconomics Consensus Forecast panelists see fixed investment rising 4.3% in FY 2014/2015, which is unchanged from last month’s estimate. For FY 2015/2016, the panel expects fixed investment to increase 6.6%, which is also unchanged.


Author:, Senior Economist

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India PMI December 2014

Note: HSBC 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: HSBC and Markit.


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