Last Update: March 01, 2023, 12:54 PM IST
In PMI parlance, a print above 50 means expansion while a score below 50 indicates contraction.
February PMI data points to improving overall operating conditions for the 20th consecutive month
Growth in India’s manufacturing sector maintained momentum in February, with new orders and output increasing at rates similar to January, according to a monthly survey. Seasonally Adjusted S&P Global India The Manufacturing Purchasing Managers’ Index (PMI) stood at 55.3 in February, little changed from 55.4 in January.
February PMI data pointed to improving overall operating conditions for the 20th straight month. In PMI parlance, a print above 50 means expansion while a score below 50 indicates contraction.
“India’s manufacturing industry maintained strong growth in output and new orders halfway through the last fiscal quarter, although the rate of international sales expansion decelerated significantly,” said the survey released on Wednesday.
Companies indicated only a mild strain on their operating capacities, with a modest increase in outstanding business in February and a corresponding increase in job numbers only marginally.
According to the survey, 98 percent of the panellists reported no change in employment. Pollyanna de Lima, economics associate director at S&P Global Market Intelligence, said job creation failed to gain meaningful traction because firms had enough workers to deal with current needs.
The domestic market was the main source of new business growth, as new orders from abroad grew only partially. International sales growth was the weakest in the current 11-month period of expansion.
“…much of the jump in new orders welcomed by firms was domestically as international sales grew at a modest pace, the weakest in nearly a year,” Lima said. On the prices front, input cost inflation rose to a four-month high, with firms citing higher prices for electronic components, energy, food, metals and textiles.
“After slipping to a 26-month low in November last, input cost inflation rose every month. The latest increase was historically subdued, however, and was the weakest in nearly two years.
“With a reduction in output charge inflation since January, the survey showed some reluctance among manufacturers to pass on the cost increase to customers,” Lima said.
Meanwhile, business confidence improved in February, with firms expecting firmer demand, new product releases and investment to bode well for growth prospects.
The S&P Global India Manufacturing PMI is compiled from responses to a questionnaire sent by S&P Global to purchasing managers across a panel of approximately 400 manufacturers. The panel has been stratified on the basis of contribution to GDP, sector wide and the size of the company’s workforce.
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