India's January manufacturing activity hits nearly 8-year high 

India’s manufacturing activity has expanded at its quickest pace in nearly eight years in January with robust growth in new orders and output, indicating an initial recovery in the demand in the Indian economy.

This comes at a time when there has been widespread concern over the economic slowdown.

The manufacturing Purchasing Managers’ Index or PMI for India shot up to 55.3 in January from 52.7 in December. This is the highest reading since February 2012.

Add WION as a Preferred Source

The recovery also suggests the economy may be getting back on firmer footing as initial growth has been registered in the new business sector.

According to a private survey by data analytics firm IHS Markit, hiring activity has also improved in January, with firms increasing employment at the fastest rate in close to seven-and-a-half years.

A figure above 50 indicates expansion, however, anything lower signals contraction.

The survey tracked new orders, output, jobs, suppliers’ delivery time, and stocks of purchases at around 400 manufacturers.

The modest growth in manufacturing indicator comes in the backdrop of improvements in several leading indicators, including goods and services tax (GST) collection and core sector industries.

In response to the jump in sales, factories also hired new workers at the fastest rate in more than seven years.

Meanwhile, both input costs and output prices rose at a slower pace, indicating overall inflation may have eased after hitting a more than five year high of 7.35 per cent in December.

This might keep the central bank, which cut its key interest rate by a cumulative 135 basis points last year, on the sidelines over the coming months.