Manufacturing activity improves in March: SBI
Manufacturing improved in March after a three month decline, while various government measures are likely to push up activity in the infrastructure sector going forward, says a State Bank of India research report.
The yearly SBI Composite Index, one of leading indicator for manufacturing activity in the Indian economy, bounced back to above 50-mark level to 50.3 after 3-months of decline.
Besides, the monthly index has also improved to 53.3 in March, from 49.2 in February, the SBI Research report said.
An index value between 50 to 52 suggests low growth, while 52-55 indicates moderate growth. The report noted that going by the findings, index of industrial production (IIP) growth may continue to be in the positive territory in February and March, this year.
Further, SBI said that the infrastructure sector is now looking up, after a long period of hiatus.
"With the various initiatives taken by the government like anti dumping duty, minimum support price in steel coupled with push in infrastructure that is railways, road, defence, port, power, smart cities etc we feel the steel, transmission and distribution (T&D), road, among others, is likely to do well from here on," the report noted.
"We now remain positive on the steel sector since adverse factors appear to have bottomed out," it added.
Noting that the National Highways Authority of India (NHAI) has awarded road projects for 3,000 km (8.2km/day) and constructed 2,350km (6.5km per day), SBI said while this is below the initial target, the momentum is expected to pick up "significantly in 2017-18".
"From the current rate of 8.2km/day, awarding activity is expected to hit 15km/day in 2017-18 (5,475 km)," it added. The report also observed that going by the initial estimates from the 19th Electric Power Survey (EPS), massive transmission corridors are underway in Northern and Southern regions for transferring power from other regions.