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Charts & Analysis

Manufacturing PMI at 51.4, Highest Since March 2013


India’s HSBC Markit Purchasing Managers’ Index (PMI) for Manufacturing for Jan 2014 was at 51.4, the highest since March of last year. A PMI reading above 50 indicates expansion, and below 50 is contraction.


Interestingly, although it looks like inflation is down in vegetables, it’s not so in manufacturing:

Average input costs rose in January, with  manufacturers reporting higher prices for a range of raw materials, including metals, chemicals and energy. The rate of cost inflation remained robust. Consequently, companies raised their tariffs again. Although the strongest in three months, the latest rise in output charges was moderate and much weaker than seen for input costs.

As you can see from the graph, this isn’t such a huge thing but it’s coming off from negative territory. Are these the green shoots we’ve been waiting for? The taper isn’t making us look like it.

  • Rakesh Ojha says:

    Hi Deepak,
    This cannot be the “green shoots”!!! World is at the cusp of a deflationary crash (due to horrible macro around the world and collapsing credit bubble) with epicenter in West and China. Emerging markets are crumbling because of their own horrible macro picture (twin deficits, currency crisis, inflation and capital outflows). This is just the beginning (opening wicket down). Investors will be better of selling equities (sensex heading to 12,000….trend line since 1979), owning USD and yes i agree with you on investing in debt fund of shortest maturiy.
    Pl note: West is deleveraging/crashing in what is the biggest credit bubble since 1723 (Mississippi bubble), and it is not over yet!

  • Rakesh Ojha says:

    To add, this one is bigger than 1929 bubble!