India`s factory activity expands fastest |
India`s factory activity expanded at the fastest pace in five years in December, a private sector survey showed, buoyed by a rise in output and new orders, which allowed firms to raise prices. The data firms up views that business in Asia`s third-largest economy continues to recover but also highlights risks that rising price pressures will keep the Reserve Bank of India (RBI) from slashing interest rates further. The Nikkei Manufacturing Purchasing Managers` Index, compiled by IHS Markit, rose to 54.7 in December from November`s 52.6, marking its fifth straight month above the 50 level that separates expansion from contraction. India`s goods-producing economy advanced on its recovery path, with operating conditions improving at the strongest pace since December 2012, according to Aashna Dodhia, an economist at IHS Markit. Strong business performance was underpinned by the fastest expansions in output and new orders since December 2012 and October 2016, respectively. Anecdotal evidence pointed to stronger market demand from home and international markets. The country`s manufacturing sector witnessed higher payroll figures in December while the rate of job creation rose to its highest since August 2012. The latest survey showed the new orders sub-index, a proxy for domestic demand, also rose to 56.8 in December, the highest since October 2016.
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