Despite major emerging economies in the region recording a slump in their manufacturing activity, India has emerged as an exception, as the manufacturing activity is expanding at the fastest rate in 14 months, reports Nikkei Asian Review.
The latest data comes from the Nikkei Purchasing Managers’ Index (PMI) survey of this month, which is conducted on a monthly basis. The monthly Nikkei PMI survey collects the data from companies in major Asian countries except for China regarding changes in output, orders and other business conditions relative to last month. Of the 15 data sets analysed in the PMI for February, nine countries saw a drop compared to the previous month while only six rose, with manufacturing seeing a specifically widespread decline.
India has been a notable exception as the manufacturing PMI rose to 54.3 from January’s 53.9, its highest level since December 2017. A PMI reading below 50 indicates a slowdown in manufacturing activities, while over 50 points to expansion.
The Nikkei Asian Review report says that the Indian manufacturing industry is mainly comprised of chemicals, machinery, metals, and textiles. The increasing growth in the manufacturing sector is attributed to Prime Minister Narendra Modi’s ‘Make in India’ initiative, which seeks to transform manufacturing in the country.
In February, 21% of the companies surveyed signaled an increase in new orders. Reportedly, automobile giants Mahindra & Mahindra has sold 52,915 cars in the domestic market during the month, an increase in 9% sales compared to last year. “A number of panelists indicated the acceptance of bulk orders from clients in key export destinations,” the survey also noted.
According to Shilan Shah, an economist at Capital Economics, prospects for Indian manufacturers remain bright over the near term. He further added that the Modi government has unveiled policies to the benefit of small and medium-sized enterprises ahead of the general election that is due by May.
On the other hand, most other Asian nations recorded lower PMI numbers in February as they continued to be affected by the US-China trade tensions as well as the global technology slump. Especially hard hit by the manufacturing slowdown in Asia are Japan and South Korea, which are mainly dependent on exports to China, who is on a trade war with the US.