The contraction in industrial output continued due to sluggishness in the manufacturing sector. The HSBC manufacturing PMI, an indicator of output growth, improved to 51.4 in Jan'14 from 50.7 in Dec'13, suggesting a marginal pick up in manufacturing activity. Although the pick-up in manufacturing activity is a welcome news, the continuing slump in automobile production and the rising interest rates are a cause of concern. However, in view of a moderating base, a sustainable growth in the manufacturing sector and a strong revival in investment activity, the industrial output may enter the positive zone and post a lower single digit growth in Jan'14.
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