Finally business sentiment was at the strongest level seen since GST implementation: Nikkei India Mfg PMI

New Delhi, May 2 (KNN) India has seen its growth in manufacturing activity in April thanks to faster expansions in output and new orders, according to an industry survey.

It said finally, business sentiment was at the strongest level seen since the implementation of the Goods and Services Tax in July 2017.

The Nikkei India Manufacturing Purchasing Managers' Index, or PMI, rose to 51.6 in April from 51.0 in March. A reading above 50 signals an improvement, while one below 50 points to a contraction in manufacturing activity.

Solid rise in production in consumption and intermediate groups stimulated job creation.

"Encouragingly, PMI data highlighted inflationary pressures moderated for the second month in a row, with input cost and output charge inflation at the weakest since September 2017 and July 2017 respectively," commented Aashna Dodhia, Economist at HIS Markit.

Dodhia underlined that "business sentiment was at the strongest level seen since the implementation of the Goods and Services Tax in July 2017, driven by expectations that underlying demand will improve further over the next 12 months."

Optimism reflected expectations that new business and demand conditions will improve over the coming 12 months, the panellists added.

The survey highlights that new business rose for the sixth consecutive month. Although modest, the rate of expansion accelerated since March.

Panellists reported that stronger market demand led to greater client wins. As was the case with output, growth was registered in consumption and intermediate goods. New orders from overseas rose for the sixth successive month in April, albeit only marginally. Moreover, the rate of expansion moderated to the weakest since November 2017.

Meanwhile, divergences were recorded for both pre- and post-production stocks. The former rose at the fastest pace in 2018 so far, while inventories of finished goods were depleted at the joint-fastest rate in the survey history.

Indian manufacturers faced higher input costs during April, thereby extending the current period of inflation to just over two-and-a-half years. Although solid, input cost inflation moderated for the second month in a row to the weakest since last September. Meanwhile, firms raised their selling prices at the weakest rate in the current nine-month sequence of inflation. (KNN Bureau)