India’s manufacturing sector continued to expand in February, although at a slower pace compared to January, according to the HSBC India Manufacturing Purchasing Managers’ Index (PMI) released by S&P Global.
The PMI fell to 56.3 in February from 57.7 in January, indicating a decline in the rate of growth. But despite the slowdown, the reading remained above the 50-mark, which separates expansion from contraction, reflecting a robust improvement in business conditions.
S&P Global said “The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index™ (PMI®) registered 56.3 in February, down from 57.7 in January but still indicative of a further robust improvement in the health of the sector”.
The report showed that the pace of sales and output growth weakened to its lowest level in 14 months.
However, demand remained strong, and the expansion streak in output extended to 44 months. Manufacturers attributed the growth to improved demand, technological investments, and the launch of new projects.
Business conditions improved across all three key manufacturing segments–consumer goods, intermediate goods, and investment goods. Although the growth rate slowed compared to previous months, it remained above the long-term average.
February marked the 44th consecutive month of rising new business orders. Companies reported strong client demand and competitive pricing strategies as key factors driving this growth. However, the overall pace of expansion was slightly lower than in January.
It also added that export orders also continued to grow at a strong pace, supported by robust global demand. Though the growth rate eased compared to January’s near 14-year high, it remained sharp.
The job market in the manufacturing sector saw strong hiring activity. The rate of job creation in February was the second-highest in the survey’s history, only behind January. Around 10 per cent of firms reported hiring more workers, while only 1 per cent reduced their workforce.
It stated that the manufacturers also increased their purchasing activity, although at the slowest rate in 14 months. Companies reported rebuilding stocks and securing supplies to prevent input shortages. As a result, pre-production inventories rose significantly.
On the other hand, finished goods stocks declined as firms relied on existing inventory to meet demand. The survey also noted improvements in supplier delivery times for the 12th straight month.
Overall, while India’s manufacturing sector faced some moderation in growth, it remained on a strong footing, driven by steady demand, global orders, and job creation. (ANI)
