New Delhi, March 1 (IANS): The Indian manufacturing sector saw its strongest improvement in business conditions in February since December 2017, as accelerated increase in sales fuelled growth of output and employment, said Nikkei India Manufacturing Purchasing Managers Index.

The Nikkei India Manufacturing Purchasing Managers Index, or PMI, was up to 54.3 in February from 53.9 in January. Readings above 50 points to expansion, while those below 50 indicate contraction. The latest figure was stronger than seen on average over the 14-year survey history.

New orders were supported by international sources, increasing manufacturing output at the quickest rate since December 2017, bolstered by inflows of new business, technological progress and supportive government policies. Pre-production inventories increased as well as job creation was sustained.

"The survey results suggest that manufacturing likely to provide stronger contribution in overall economic growth in the final quarter. March's figures are on favourable path," said Pollyanna De Lima, Principal Economist at IHS Markit which compiled the survey.

"For FY19, IHS Markit has revised higher its GDP growth forecast, from 7.0 per cent to 7.1 per cent amid the announcement of fiscal stimulus for the new interim budget and the policy rate cut announced in February," she added.

"Manufacturing PMI at 54.3 in February is 14-month high and indicates strong inflow of new orders. Q4 2018-19 should mark further strengthening of manufacturing gross value added (GVA) and upward movement of GDP growth," DEA Secretary Subhash Chandra Garg tweeted.