Manufacturing sector health improved in March: PMI

Manufacturing activity in India seems to be on the mend on the back of the series of fiscal as well as monetary steps taken by the Government to mitigate the impact of the global financial-cum-economic meltdown, a key barometer released by ABN Amro Bank showed. The Dutch bank's purchasing managers' index (PMI), based on a survey of 500 companies, rose to a seasonally adjusted 49.50 in March from February's 47.0. Although the PMI shows contraction in manufacturing for a fifth straight month there are some signs of improvement. The index showed signs of slight improvement after hitting a trough of 44.4 in December. A reading above 50 signals economic expansion while a figure below 50 suggests contraction. "On the whole, it appears that business conditions in the manufacturing sector are gradually improving," said Gaurav Kapur, senior economist at ABN Amro Bank India. "It appears that domestic demand is picking up. External demand, however, remains weak and contracted in March too, for the sixth consecutive month," Kapur added. The new orders index rose to 49.5 from 45.9 in February.