India’s manufacturing in January 2018
India’s manufacturing PMI (purchasing managers’ index) stood at 52.4 in January 2018, compared with 54.7 in December 2017. The reading missed the market expectation of 54.5 and marked the weakest expansion in manufacturing activity since October 2017.
The weaker manufacturing activity in January was mainly due to the following factors:
- production output and volume rose at a weaker rate, marking the slowest expansion in three months
- new and export orders slowed
- employment in the manufacturing sector rose at the slowest pace since October 2017
Consumers’ buying activity remained weak in January, which impacted overall business sentiment. The aftermath of the implementation of GST (goods and services tax) in July 2017 remained confusing for investors, affecting both consumer and business sentiment. However, the economy seems to be gradually recovering, with improved economic activity.
The iShares MSCI India ETF (INDA), which tracks India’s economy, rose nearly 3.2% in January 2018. The iShares India 50 ETF (INDY), the iShares MSCI India Small-Cap ETF (SMIN), and the WisdomTree India Earnings ETF (EPI) returned 4.7%, -1%, and 3.7%, respectively. In the next part of this series, we’ll analyze India’s service PMI in January 2018.