The SBI Composite Index, an indicator for tracking India’s manufacturing activity, has shown a significant growth in output both in terms of month-on-month and yearly basis in March.
The monthly index has shown robust growth of 58.5 in March 2015, from 47.6 in February 2015, signalling the highest pace of growth in last 48 months.
“Robust recovery in the month on month index may be attributed to seasonal factors as March sequential momentum is always higher,” SBI said in a research note.
The monthly index had slipped from 52.6 in January 2015 to 47.6 in February 2015.
The yearly SBI Composite Index for March 2015 inched up to 54.6 from 53.5 in February 2015, a 6-month high.
The Index captures two components of the manufacturing cycle – month-on-month and year-on-year-growth on a scale of 0 to 100.
Index above 50 implies growth over previous respective period and less than 50 will suggest a contraction over respective period.
An index value of less than 42 means large decline, while value of 42 to 46 means (moderate decline), 46 to 50 (low decline), 50 to 52 (low growth), 52 to 55 (moderate growth) and above 55 high growth, SBI said.