A day after the government announced dismal economic growth numbers, a survey showed steady expansion of India’s manufacturing sector during May, raising hopes that the industrial slowdown may stabilise in the coming months. The HSBC manufacturing Purchasing Managers’ Index (PMI), compiled by Markit, declined marginally to 54.8 in May from 54.9 in April.
The reading for India in the widely-followed survey has stayed above 50, which separates growth from contraction, for a little over three years.India is the only bright spot in the latest survey, with China’s official PMI slumping to 50.4 from 53.3 in April and the eurozone reading touched its lowest level since 2009.
While the pace of expansion in the sector slowed down to its lowest level in three years last November, it picked up in January and has continued at a steady pace since then. The PMI, however, cautioned that output growth might dampen marginally next month. The employment sub-index rose to its highest level in 10 months.
The trend thrown up by the PMI is, however, at odds with the government’s estimates, which show subdued growth in industrial output since December 2011, leading to a 3.5% contraction in March.
The government data on Thursday showed that economic growth in the quarter to March had slumped to 5.35, thanks to a 0.3% contraction in manufacturing during the period.