Manufacturing sector growth improves in October: SBI Index

New Delhi: Country's manufacturing sector growth improved in October largely driven by the manufacturing sector, but mining and electricity are still acting as a drag on the economic activity, says a report.

The monthly SBI Composite Index, an indicator for manufacturing activity in the country, increased to 50.8 in October from 48.4 in September.

However, the yearly index for October stood at 53.6 compared with last month index of 53.9.

"The upturn has been majorly driven by manufacturing, while mining and electricity are still acting as a drag on economic activity," the report said adding that the positive trends in capital goods sector suggest the possible pick-up in economic momentum.

According to SBI sectors like power, steel, green energy, hydrocarbon and telecom will see a strong credit demand in the coming quarters. While, personal loan segment, especially housing and vehicle loan are likely to see an uptick.

The report further noted that around 7 per cent growth in IIP is likely for the month of September or October, or possibly both.

An index 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), it said.

The SBI Composite Index rivals the existing data point from Nikkei. It has been developed on basis of the bank's internal loan portfolio, which mirrors the credit demand in the country, and other data sets available in public domain.