India's Manufacturing Sector Continues Growth With 55.3 PMI In February

India's manufacturing industry sustained robust growth of output and new orders halfway through the final fiscal quarter, albeit with a notable slowdown in the rate of international sales expansion. Companies continued to scale up input purchases, while job numbers expanded only fractionally amid a general lack of pressure on operating capacities. Meanwhile, input cost inflation accelerated to a four-month high but there was a softer upturn in selling charges.

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 signaling a strong improvement in the health of the sector. The headline figure was also above its long-run average of 53.7.

 

Amid reports of accommodative demand conditions and successful marketing campaigns, manufacturers experienced an increase in new work intakes. Data implied that the domestic market was the main source of new business growth, as new orders from abroad increased only fractionally. February data pointed to twentieth consecutive rise in manufacturing production.

Input costs in the manufacturing industry increased further. Some firms opted to pass cost increases through to clients by lifting their selling prices, while the vast majority (94%) left their fees unchanged in attempts to boost sales. Ongoing increases in sales and efforts to rebuild inventories prompted firms to lift input purchasing in February. Business confidence improved in February, with firms expecting demand strength, new product releases and investments to bode well for growth prospects.

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