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Manufacturing on rise
Why is it in the news ?
- The country’s manufacturing sector activity edged higher in January as companies continued to scale up production and employment.
- The rise is driven by the fastest rise in factory orders since December 2017.
More about the Tribunal
- The Nikkei India Manufacturing Purchasing Managers' Index increased from 53.2 in December to 53.9 in January, indicating stronger improvement in the health of the goods producing sector.
- This is the 18th consecutive month that the manufacturing PMI remained above the 50-point mark.
- In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.
- Besides, favourable economic conditions, strengthening demand and sales growth also picked up in January.
- According to experts the signs of easing inflationary pressures indicate that the Reserve Bank of India (RBI) is likely to adopt an accommodative monetary policy stance.
PMI Index
- PMI or a Purchasing Managers' Index (PMI) is an indicator of business activity -- both in the manufacturing and services sectors.
- This index is prepared on the basis of a survey which is conducted among purchasing executives in over 400 companies.
- These companies are divided into eight broad categories:
1 Basic metals,
2 .Chemicals and plastics,
3. Electrical and optical,
4. Food and drink,
5. Mechanical engineering,
6. Textiles and clothing,
7. Timber and paper,
8 .Transport.
- Index over 50 shows expansion, while below 50 mean contraction.
Source
The Hindu.