The country's manufacturing sector activity improved in December driven by new orders that rose at the fastest pace since July as companies ramped up production and resumed hiring efforts, a monthly survey said.
Notwithstanding the improvement in operating conditions during December, companies were cautious regarding the annual outlook of 2020 and this could have an impact on job creation and investment in the year, the survey said.
The IHS Markit India Manufacturing PMI rose from 51.2 in November to 52.7 in December, registering the "joint-strongest" improvement in 10 months.
"Factories benefited from a rebound in demand and responded by scaling up production to the greatest extent since May. There were also renewed increases in input purchasing and employment during December," said Pollyanna de Lima, Principal Economist at IHS Markit.
As per the survey, new work orders witnessed a marked improvement, with the pace of expansion picking up to the fastest since July.
Moreover, the uptick in total sales was supported by higher demand from overseas. New export orders expanded for the 26th month in a row, albeit modestly, the survey said.