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Does India’s Manufacturing PMI in October Indicate a Strong Path?

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India’s manufacturing PMI

According to a report by Markit Economics, India’s Manufacturing PMI (purchasing managers’ index) stood at 54.4 in October 2016, as compared to 52.1 in September. This strong figure indicates improving business activity in the country, particularly in new export orders and production volumes in October.

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Economic impact

India’s Manufacturing PMI has not fallen into contraction for one year. However, we have seen that the US (QQQ) (SPY), Europe (VGK), and Japan (EWJ) have all shown contractions several times in the last year.

These stronger PMI numbers in the past year indicate that India’s (INDA) overall economic conditions could continue to grow. The country’s first fiscal quarter in 2016 saw economic growth of 7.9%—its largest jump since 4Q14. It’s expected that the country’s economy will grow similarly in 2017.

India’s domestic consumption is also slowly improving, as has employment growth. Notably, political stability in India will have a positive impact on the economy, and the government is taking steps to allow businesses to operate smoothly in the country.

In the next part of this series, we’ll look at Canada’s (EWC) manufacturing PMI for October 2016.

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