3.5.13

Manufacturing PMI


Manufacturing activity slumped to its lowest since November 2011.
The HSBC Manufacturing Purchasing Managers' Index (PMI) dropped to 51.0 in April from 52.0 in March.
“Manufacturing activity lost momentum again in April, with output growth slowing further on the back of a deceleration in domestic orders,” Leif Eskesen, chief India economist at HSBC said in a statement on Thursday. The survey also validated the recent drop in inflation, showing a drop in both input costs and price charged to the customers in April from the month before. “Encouragingly, input and output price inflation eased. With the growth momentum slowing and inflation receding, the RBI is likely to cut the policy rate this week,” Eskesen said.
Headline wholesale inflation eased to 5.96% in March from 6.84% in February, and the recent softening in fuel prices suggests it could decline further in the coming months.
The central bank has been reluctant to cut interest rates even as economy slipped to a decade low growth rate of 5% in 2012-13 because of high current account deficit and high inflation. The softening in commodity prices and lower trade deficit in March has raised the comfort level though.
A pick up in the export orders index of the PMI suggested it could improve further

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