India's manufacturing activity continued to see a sharp rise in December, with its PMI's coming in at 56.4, a bit higher than 56.3 the previous month. This is the fifth consecutive month in which manufacturing activity has risen, after having contracted earlier this year due to the COVID-19 pandemic and the resultant lockdowns.

A PMI (Purchasing Managers' Index) reading above 50 shows expansion in activity, while one below 50 indicates contraction. "It's important to emphasize the broad-based nature of the recovery, with marked expansions in both sales and output noted across each of the three monitored sub-sectors," said Pollyanna De Lima, economics associate director at IHS Markit. Input buying by manufacturing firms increased at the fastest pace in nearly a decade in an effort to rebuild pre-production inventory, while the rise in new work led to a sharp decline in finished goods. While the rates of increase in factory orders and production remained sharp in December, they eased to four-month lows.

New exports orders also rose at the slowest pace in four months. All major parameters were in the positive zone, but one area that remained a point of concern was employment in the sector. Employment declined for the ninth consecutive month in December, albeit at the slowest pace in the downturn period. Manufacturing firms reported COVID-19 restrictions and difficulties in finding suitable staff as reasons behind the decline in jobs.

On the price front, input costs rose at the fastest pace in 26 months in December due to higher prices of chemicals, metals, plastics, and textiles. However, the rise in selling price was only marginal. While the manufacturing PMI prints for November and December have come in lower than October's over-a-decade high print of 58.9, the average for the quarter ended December remains impressive. 

India’s tablet PC maker Lenovo targets 30 pc growth

Pvt banks witness increase in NPAs in FY20: RBI

Govt plans 10pc stake sale in RCF, invites bids from merchant bankers