Strong domestic demand pushes up factory growth

RBI may get encouraged by good output and reduce interest rates

GN Bureau | June 1, 2015


#manufacturing   #HSBC   #manufacturing  

Riding on domestic demand, Indian manufacturing activity rose at its fastest pace in four months in the month of May, a business survey found on Monday.

The figures are expected to give another boost to a possible central bank interest rate cut. The Reserve Bank of India is holding a policy review on Tuesday.

The HSBC Manufacturing Purchasing Managers' Index, compiled by Markit, rose to 52.6 in May from April's 51.3, smashing the 51.2.

Any reading above 50 indicates expansion and May was the nineteenth straight month of industry growth. An index monitoring new business, which highlights underlying demand, jumped to 54.3 in May from 51.9.

Firms reduced staffing levels for the third month out of the last four in May. What may also cause the RBI some concern is the rate of price rises - although April inflation was well within the upper-end of the central bank's target.

The RBI is widely expected to cut its key interest rate by 25 basis points to 7.25%, when it meets on Tuesday.

Indian GDP data, which released on Friday, showed the economy grew 7.3% in the fiscal year 2014/15, and expanded faster than China for a second consecutive quarter.

While that seems healthy there are nagging doubts over the reliability of the data. Many economists believe that changes made earlier this year to the way government statisticians calculate GDP may have distorted the macroeconomic view.

Comments

 

Other News

Here’s an I.D.E.A. for career growth and success

Success in today’s professional organisation is no longer solely determined by academic qualifications, technical expertise or years of experience. While these attributes do matter, organisations increasingly value individuals who demonstrate the right mindset and behavioural qualities. The ability

PM interacts with CEOs, founders of space startups

Prime minister Narendra Modi interacted with CEOs and Founders of 20 Space Startups at Seva Teerth on Friday.   CEOs of leading companies in the space sector working in diverse fields ranging from building rockets and reusable semi-cryogenic launch vehicles, avionics, satelli

From one cow to a dairy business

In 2012, Anita Dash wasn`t dreaming of building a dairy brand. She wasn`t studying business models or planning market expansion. Like countless mothers across India, her focus was on something much simpler: giving her children a better future.   At the time, her most valuable

Ethanol blending: The two sides of a story

India`s crude oil consumption is estimated to be around 88.5% imported from abroad. This one single figure is also responsible for why ethanol has become both an economic strategy and fuel policy at the same time. In an economy like India, which depends so heavily on foreign oil, any increase in internat

Food inflation: Not a macroeconomic statistic but a developmental indicator

India`s retail inflation shows a reassuring picture at first glance. According to the latest data, Consumer Price Index (CPI) inflation edged up to 4.38% in June 2026 from 3.93% in May 2026, but continued to remain within the Reserve Bank of India`s (RBI) target band of 4% (+/- 2%). However, beneath this

Skin in the game or masterful market timing?

When a company founder opens their personal chequebook to buy shares in their own business, stock markets usually applaud. To the average retail investor, it feels like the ultimate vote of confidence, a sign that the people running the show have real skin in the game and believe brighter days are ahead.

Upcoming Conferences



-->

Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter