India’s manufacturing activity changed little, almost remained flat, in the month of February, according to the S&P Global PMI data. Manufacturing PMI was recorded at 55.3 in February, as against 55.4 in January.
“The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index® (PMI®) was at 55.3 in February, little-changed from 55.4 in January and signalling a strong improvement in the health of the sector. The headline figure was also above its long-run average of 53.7,” stated S&P.
The manufacturing industry sustained robust growth of output and new orders halfway through the final fiscal quarter but there was a slowdown in the growth rate of international sales expansion. Companies continued to scale up input prices, and job numbers expanded only fractionally.
Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said: “Growth momentum in India’s manufacturing industry was maintained in February, with new orders and output increasing at similar rates to January. Companies were confident in the resiliency of demand and continued to add to their inventories by purchasing additional inputs. Job creation failed to gain meaningful traction, however, as firms reportedly had sufficient staff to cope with current requirements. Indeed, there was only a marginal increase in their backlogs. Suppliers also appeared to have ample capacity to accommodate for rising input demand, shown by a stabilisation in delivery times.”
De Lima said that the PMI results suggest that most of the upturn in new orders by firms were domestically driven since international sales were weakest in almost a year. Input cost has been on the rise since slipping to a 26-month low last November, but the latest rise was among the weakest in around two years. “The survey showed some reluctance among manufacturers to pass on cost increases to clients, with output charge inflation easing since January,” said the economist.
February data pointed to the 20th consecutive rise in manufacturing production, but the rise in international sales was weakest in the current 11-month period of expansion.
Input costs in the manufacturing industry increased further, with higher prices for electronic components, energy, foodstuff, metals and textiles. Inflation was at a four-month high but below its long-run average and among the weakest in over 2 years.
Some firms passed on cost increases to client but the vast majority of 94 per cent left their fees unchanged as they tried to boost sales. Buying levels rose sharply, the report stated.