Over the last few months, Index of Industrial Production and Purchasing Managers Index have shown higher growth rate, thereby signalling a spur in manufacturing activities across the nation

The Indian manufacturing sector is surely on a revival mode after witnessing contraction in its activities during the global economic meltdown. According to a survey conducted by Machinist360.com, a whopping 100% of the respondents feel that manufacturing activities are expanding in the nation.

 High growth in IIP and PMI

Over the last few months, a constant growth has been witnessed in the Index of Industrial Production (IIP), the parameter representing the status of production in the industrial sector. It is to be noted that in the month of January 2010, IIP index stood at 332.3, registering a growth of 16.7% as compared to January 2009 when the same stood at 280.4. In this context, Deepak Sahi, managing director of Sahi Enterprises, a small-sized manufacturer of plastic products in New Delhi says, “Production of capital goods and consumer durables have gone up significantly over the last few months, which has given a thrust to IIP. Setting up of manufacturing units in the country by foreign firms has also spurred production, thereby elevating IIP.”

Another key pointer that highlights the robust health of the manufacturing sector is the Purchasing Managers Index (PMI). In the month of February, PMI stood at the 17-month highest at 58.5. According to Santosh Yadav, managing director of Santosh Electronics, a small-sized electric switch manufacturer in Asansol, West Bengal, “The last few months have witnessed increased investments being made in various verticals within the manufacturing sector. PMI above 50 suggests that manufacturing activities are expanding. Export of Indian products has also witnessed a significant growth, which in turn has bolstered PMI. Companies are increasingly getting new orders, thereby ramping up production.”

It is anticipated that the coming of several manufacturing units, coupled with expansion within the existing ones by various firms engaged in manufacturing will further boost manufacturing activities in 2010-11.

Arup Choudhury