The manufacturing purchasing managers's index (PMI), which is seasonally adjusted, was 57.5 in February, the seventh consecutive monthly expansion, even though it was marginally down from the 57.7 mark registered in January. According to a recent research report by Barclays, the manufacturing sector has registered growth over the past six months and the PMI has shown activity recovery gathering steam. The multinational firm expects the positive momentum to continue as both fiscal and monetary policies remain supportive. Additionally, a fast nationwide vaccine rollout could provide a further boost to the normalisation of economic activity, said the report. (Also Read: Agriculture, Industrial Sectors Accelerate As India Posts 0.4% Growth In December Quarter )
For the fourth and last quarter of the current financial year, Barclays experts the gross domestic product (GDP) growth to be 2.7 per cent year-on-year, and at 11 per cent year-on-year for the fiscal year. The employment situation remains poor, however, with new hiring, it is now declining for 11 months in succession. With new export orders and domestic orders remaining elevated, the business activity and input stocks continue to rise.
Meanwhile, on the domestic macro-economic front, after contracting for two quarters in a row, the economy recorded a 0.4 per cent growth in the October-December quarter of the financial year, mainly due to growth registered in the agriculture, manufacturing, services, and construction sectors.
“With the economy moving towards normalcy, most economic indicators had been improving in the last few months and hence the movement of third-quarter GDP growth to the positive territory does not come as a surprise. As expected, the manufacturing sector has bounced back recording a positive growth. Strong revival in construction sector has also boosted overall GDP growth. Among the service sectors, positive growth in financial services and real estate sector bodes well for the economy, said Ms. Rajani Sinha, Chief Economist and National Director – Research, Knight Frank India.