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Manufacturing sector activity rises
Why is it in the news?
- Country’s manufacturing sector witnessed improvement in its activity in October, as new orders increasing at a sharp rate and firms stepping up hiring.
More in the news
- The Nikkei India Manufacturing Purchasing Managers’ Index(PMI) strengthened from 52.2 in September to 53.1 in October.
- This is the 15th 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.
- New orders increased at a sharp rate during October and panellists attributed this rise to:1. Successful advertising efforts,2. Strengthening underlying demand and3. Competitive price-setting.
- A combination of domestic and foreign orders fuelled the upturn in overall activity.
- Manufacturers stepped up hiring in October to meet rising demand conditions; and job-creation during the month was the strongest since last December.
What is PMI?
- PMI or a Purchasing Managers' Index (PMI) is an indicator of business activity - both in the manufacturing and services sectors.
- It is a survey-based measures that asks the respondents about changes in their perception of some key business variables from the month before.
- It is calculated separately for the manufacturing and services sectors and then a composite index is constructed.
- A figure above 50 denotes expansion in business activity. Anything below 50 denotes contraction.
Source
Indian Express.