Strongest improvement in manufacturing conditions since December 2012: Nikkei India Manufacturing PMI

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The Indian manufacturing sector ended the year on a strong note, with operating conditions in December improving at the strongest rate in five years driven by significant increase in new orders, a monthly survey said.

The country's manufacturing purchasing managers' index (PMI) came in at 51.6 in December, slightly decelerating from 51.8 in November, according to National Bureau of Statistics (NBS) data released Sunday. It was also lower compared to the 55.7 reading posted a year earlier.

The index considers any score above 50 to be an improvement, while those below signify a contraction.

This is also the highest PMI in the last three months of October, November and December.

The slowdown was reflected in the drop in buying activity in December, the sharpest decline since September.

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However, Zhong cautioned that "downward pressure" on growth next year will remain due to "tightening monetary policy and strengthening oversight on local government financing".

Growth in China's manufacturing sector slowed slightly in December as a punishing crackdown on air pollution and a cooling property market start to weigh on the world's second-largest economy.

This signalled a broad stagnation in the goods-producing economy, following the strongest growth in over three-and-a-half years in the previous month.

Commenting on the Nikkei India Manufacturing PMI data, Economist at IHS Markit, Aashna Dodhia, said: "The sector continues to face some turbulence as delayed customer payments contributed to greater volumes of outstanding work". The official PMI dropped to 51.6 from 51.8 in November, as more companies complained about the impact on their operation from tightened supply of energy and other raw materials and rising costs of transportation.

"Businesses retained positive forecasts for outputover the next 12 months (on) projections of an improvement in underlying demand conditions", it noted. The Caixin China General Services Business Activity Index will be published on Thursday.