Our Bureau
New Delhi
India’s manufacturing activity strengthened further in February, with the Purchasing Managers’ Index (PMI) rising to a four-month high of 56.9 from 55.4 in January, according to data released by HSBC.
However, the data report noted that the pace of growth in new export orders eased to its slowest in 17 months.
The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) – a gauge of overall conditions derived from measures of new orders, output, employment, supplier delivery times and stocks of purchases.
HSBC said that the PMI numbers “rose from 55.4 in January to a four-month high of 56.9 in February. The latest figure was consistent with a marked improvement in the health of the sector”
The survey showed that a substantial improvement in domestic demand for Indian goods fuelled new order intakes and led to the strongest expansion in production volumes in four months. Goods producers indicated that demand buoyancy, marketing initiatives and rising client requirements underpinned another increase in new business intakes. The pace of growth was described as historically elevated and the strongest since last October.
Output also rose at the fastest pace in four months and was above its long-run average. According to panel members, efficiency improvements, healthy underlying demand, rising intakes of new work and technology investment collectively boosted production volumes.
In response to increasing workloads, firms stepped up input purchasing, raised their inventories and hired additional staff, reflecting confidence in sustained demand conditions.
However, the survey noted that new export orders saw a softer expansion. February’s rise in external sales was the slowest in 17 months, with the pace of growth broadly converging towards its long-run average. Where export sales increased, companies cited gains from Asia, Europe, the Middle East and the US.
It stated “One area where growth took a step back was new export orders. February’s increase was the slowest in 17 months”.
Despite the moderation in export growth, the overall outlook remained positive. Year-ahead assessments of output volumes continued to reflect optimism, with 16 per cent of companies forecasting growth and fewer than 1 per cent anticipating a reduction.
So the February PMI data highlighted strong domestic demand momentum supporting manufacturing activity, even as export growth showed signs of easing.
