Text size:

  • Small
  • Normal
  • Large
India has been struggling with slowing economic growth, high inflation levels and a weak currency. Above, a worker welds metal in New Delhi. Prashanth Vishwanathan / Bloomberg News
India has been struggling with slowing economic growth, high inflation levels and a weak currency. Above, a worker welds metal in New Delhi. Prashanth Vishwanathan / Bloomberg News

Indian manufacturing revives after four-month slump on new orders

The figures lifted the rupee to a two-week high yesterday, touching 61.96 against the US dollar after closing at 62.44 against the greenback on Sunday.

MUMBAI // India’s manufacturing activity returned to growth last month for the first time in four months, a further sign of economic improvement.

The data followed a positive surprise on Friday when the latest GDP reading showed a slight rebound.

The figures lifted the rupee to a two-week high yesterday, touching 61.96 against the US dollar after closing at 62.44 against the greenback on Sunday.

The benchmark S&P Bombay Stock Exchange Sensex rose 0.51 per cent yesterday to close at 20,898.01.

The HSBC purchasing managers’ index for India, compiled by Markit, climbed to 51.3 last month from 49.6 in October. A reading above 50 indicates expansion, while a reading below 50 shows contraction. This was the first reading above 50 since July, HSBC said, with manufacturing activity boosted by incoming new work.

“Manufacturing activity picked up, led by a rise in new domestic orders, which helped pull up output growth,” said Leif Eskesen, HSBC’s chief economist for India and Asean.

“Encouragingly, input and output price inflation eased, which, if sustained, could imply that the RBI [Reserve Bank of India] is getting closer to the end of its tightening cycle, although it may still need to notch [interest] rates up a bit further.”

India has been struggling with slowing economic growth, high inflation levels and a weak currency.

The Indian central bank raised interest rates in October for the second consecutive month to fight uncomfortably high inflation.

National GDP for the July to September quarter grew at a better than expected 4.8 per cent, official data released on Friday showed. That was an improvement from growth of 4.4 per cent in the previous quarter. India is believed to need economic growth of about 8 per cent to create jobs for its population and help lift millions of out of poverty. Its GDP growth slowed to a decade-low of 5 per cent in the last financial year.

Some economists say that the economic slowdown seems to be bottoming out, although they also say that a sustained recovery will be difficult over the coming months because of factors, including the general elections (which are expected by May), that are hampering investment.

Miguel Chanco, the India economist at Capital Economics, said: “Looking ahead, we believe that the economy’s road to recovery will be slow and bumpy. The main factor holding back the domestic economy is the poor investment environment. A whole host of investment projects are currently stalled because of bureaucratic issues.”

business@thenational.ae

Back to the top

More articles


Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Miele coffee maker making Cappuccino at Miele Gallery in Sama Tower in Dubai. The cost of this coffee maker is around Dh 17,000. Pawan Singh / The National

Space-age coffee comes at a price from Miele

Miele have taken the coffee machine to a new level with its Dh17,000 offering that is built into your kitchen.

 The bridge of Seajacks Hydra, as the wind farm installation vessel undergoes finishing touches and testing works at Lamprell’s Hamriyah facility in Sharjah before its planned delivery on June 2, 2014. Jeffrey E Biteng / The National

In pictures: Building the Seajacks Hydra

The Seajacks Hydra, a wind farm installation vessel, is undergoing finishing touches and testing works at Lamprell’s Hamriyah facility in Sharjah before its planned delivery on June 2, 2014.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 The rush of new supply of hotel rooms pushed Dubai occupancy rates down to 87 per cent. Sarah Dea / The National

Dubai hotel room rates rise 10 per cent

The rush of new supply pushed occupancy rates down to 87 per cent, a dip of 2.6 per cent from the previous year. Winter months are the strongest for Dubai hotels, with occupancy and prices falling to half their peaks by July.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National