New Delhi: The PMI survey additionally cited an uptick in business self belief, factories’ output recorded a grand establishing in January, as Purchasing Managers’ Index (PMI) for production surged to 55.3 in the month, the best in almost 8 years.
Manufacturing PMI is compiled by IHS Markit from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers. The panel is stratified by detailed sector and company workforce size, based on contributions to GDP. The responses are collected in the second half of each month, and indicate the direction of change compared to the previous month. This index reflects changes in manufacturing sector and is used by policy makers.
The PMI results show that a notable rebound in demand boosted growth of sales, input buying, production and employment as firms focused on rebuilding their inventories and expanding their capacities in anticipation of further increases in new business.
However, with the improvement in manufacturing, chances for any rate revision in the month of February is completely ruled out. It should be noted that retail inflation, key for revision of policy rate, has crossed 7 per cent which is beyond the RBI’s comfort level.
