According to S&P Global, India’s manufacturing purchasing managers’ index (PMI) was at 55.3 in February 2023, barely changing from 55.4 in January and indicating a significant increase in the sector’s health. The headline figure was also higher than its 53.7-year average. Businesses increased input purchases in February as a result of ongoing sales growth and efforts to replenish stocks. The rate of increase in buying levels was faster than the long-term average.
Selling charges increased more slowly than input costs, which raced to their highest level in four months. Manufacturers saw an increase in new work intakes amid reports of accommodating demand conditions and effective marketing initiatives. The acceleration made the current growth cycle last 20 months. Moreover, the expansion rate was sharp in relation to previous statistics and was consistent with January’s results. According to the data, new business growth was mostly driven by the home market, as new orders from outside only slightly grew. The current 11-month growth period has seen the weakest increase in international sales, per the S&P Global India Manufacturing PMI data.
Further increases in input costs were reported by businesses in the manufacturing sector, including higher prices for commodities like textiles. While accelerating to a four-month high, the rate of inflation was among the lowest in more than two years and below its long-run normal.
Some businesses chose to pass on cost increases to customers by raising their selling prices, while the vast majority (94%) kept their rates the same. in an effort to increase sales. Overall, factory gate charges increased at a moderate rate that was below the long-run series average and the slowest in three months.
Stable vendor performance suggested that suppliers’ capacities were sufficient to meet the rising demand for inputs. In February, the seasonally adjusted Suppliers’ Delivery Times Index was at 50.0, remaining unchanged.
Midway through the first fiscal quarter, Indian producers of products noticed another rise in their input inventories. Businesses indicated only slight strain on their own operating capabilities, and in February, outstanding business slightly increased. The aggregate number of jobs did not change significantly as a result. In fact, 98% of the panellists said their jobs remained the same.
Meanwhile, finished goods stocks declined at the joint-slowest rate. pace during the current 67-month depletion sequence. Businesses noted the fulfilment of orders from inventories when a drop was reported. Business optimism increased in February as companies predicted that strong demand, the introduction of new products, and investments would favourably impact growth prospects.
In February, the manufacturing sector in India continued to grow at a similar pace to that of January, according to Pollyanna De Lima, associate director of economics at S&P Global Market Intelligence. Businesses kept increasing their inventories by acquiring more inputs because they were confident in the demand’s resilience. Input cost inflation has increased significantly every month since falling to a 26-month low in November of last year. Yet, the most recent rise was among the smallest in almost two years and historically muted. The poll found that producers were somewhat reluctant to pass on cost increases to customers because the inflation of output charges has been declining since January.
