Manufacturing PMI rises to three-month high

New delhi date. 01 February 2021, Monday

India's Purchasing Managers' Index (PMI) for the January manufacturing sector has seen rapid growth on rising demand and output. The pace of job cuts also slowed in January, the PMI report said. The pace of cuts in employment has been at a ten-month low.

The manufacturing Nikkei PMI, which stood at 6.50 in December, was at 6.30 in January. A PMI above 60 is called an extension of that area. The PMI has been above 50 for the sixth consecutive month in January. The January PMI has been at a three-month high.

The new orders-related sub-index has been the highest since October, indicating strong growth in demand. Companies are also increasing production, suggesting an expansion of capacity in the short term, according to a report by IHS Markets, which prepared the index.

The successful launch of the coronavirus vaccine in India is expected to boost demand by most rating agencies.

Despite the increase in demand and production, companies continue to cut employment. However, layoffs in January were at a ten-month low.

Meanwhile, rising raw material prices have forced manufacturing companies to raise the prices of their goods. The rise in prices of products in January has been at an all-time high. Inflation is likely to rise above the 5 per cent range as prices rise.

Companies have also become more optimistic about the future of growth due to the success of the anti-coro vaccine.