India’s manufacturing growth holds steady

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NEW DELHI–The pace of expansion in manufacturing activity in India held steady in February, as price cuts helped strengthen demand, a survey shows.

The seasonally-adjusted India Manufacturing Purchasing Managers’ Index, prepared by Markit, was at 51.1, unchanged from January, according to Nikkei research released Tuesday. A reading above 50 indicates expansion while one below points to contraction.

Production started to expand again in January, after contracting in December when floods in the southern-Indian auto-manufacturing hub of Chennai hurt output.

Nikkei said the latest survey shows business conditions in India continue to improve, with new orders, exports, output and purchasing activity all rising.

However, these failed to translate into stronger growth in output or worker numbers among Indian manufacturers.

“Although businesses saw a stronger rise in new work, data implied that this was partly driven by price reductions,” Pollyanna De Lima, an economist at Markit, said.

Nikkei said input cost pressures eased during the month partly because of lower crude oil prices, allowing manufacturers to reduce prices.

“In light of these numbers, the RBI has scope to loosen monetary policy to spur the economy,” said Ms. De Lima referring to the Reserve Bank of India, the country’s central bank.

Write to Anant Vijay Kala at [email protected]

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