India’s HSBC Markit Purchasing Manager’s Index (PMI) for Manufacturing for Feb 2014 was at 52.5, a 12 month high.
However, they have provided a cautionary note:
However, the recovery in activity is still likely to prove protracted given the
lingering structural constraints. Moreover, underlying inflation pressures remain potent, which was evident from the jump in the input price component of the PMI survey. This will keep RBI hawkish and likely compel it to raise rates a bit further this year.”
Input prices of chemicals, metals and textiles were sharply up, it seems.
This does not augur well for inflation that’s coming up. As food inflation subsides, are we going to see the rise of manufactured goods price inflation soon?
