According to a monthly survey, the manufacturing sector in India maintained its growth momentum in February, with new orders and output increasing at similar rates to January. In February, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) was 55.3, unchanged from 55.4 in January.
For the 20th consecutive month, the February PMI data indicated an improvement in overall operating conditions. A score above 50 indicates expansion, while a score below 50 indicates contraction. “India’s manufacturing industry sustained robust growth in output and new orders halfway through the final fiscal quarter,” according to the survey released on Wednesday. Companies indicated only minor strain on their own operating capacities. With outstanding business increasing marginally in February, job numbers increased only marginally. According to the survey, 98% of panellists reported no change in employment. According to Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, job creation failed to gain traction because firms reportedly had enough staff to meet current demands. As new orders from abroad increased only marginally, the domestic market was the primary source of new business growth. The increase in international sales was the slowest in the current 11-month expansion period. “… the majority of the increase in new orders welcomed by firms was domestically driven, as international sales rose at the slowest pace in nearly a year,” Lima said. In terms of pricing, Input cost inflation has accelerated to a four-month high, with companies citing higher prices for electronic components, energy, food, metals, and textiles. Following a 26-month low in November, input cost inflation has risen in every month since. The most recent rise, however, was historically subdued and among the weakest in around two years. S&P Global compiles the S&P Global India Manufacturing PMI from responses to questionnaires sent to purchasing managers in a panel of approximately 400 manufacturers. Based on GDP contributions, the panel is stratified by detailed sector and company workforce size.
