New Delhi: In the heart of India’s economic landscape, February marked a significant moment for the manufacturing sector, as growth dipped to a 14-month low. The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) fell to 56.3, down from January’s 57.7. Despite this decline, the sector remained firmly in expansionary territory, with a PMI reading above 50 indicating continued growth.
The slowdown was attributed to softer increases in new orders and production, according to a monthly survey released in New Delhi. However, robust global demand continued to drive growth, with manufacturers capitalizing on strong international interest in their goods. This demand, coupled with favorable domestic conditions, prompted firms to increase purchasing activity and expand their workforce.
Pranjul Bhandari, Chief India Economist at HSBC, noted, “Although output growth slowed to the weakest level since December 2023, overall momentum in India’s manufacturing sector remained broadly positive in February.” Business expectations remained strong, with nearly one-third of survey participants anticipating higher output volumes in the coming year.
On the employment front, manufacturers continued to hire more workers, with the rate of job creation being the second-best in the series’ history. The survey also highlighted that while cost burdens rose more slowly than in previous months, demand kept charge inflation elevated.
The HSBC India Manufacturing PMI is compiled by S&P Global from responses from around 400 manufacturers. This data comes as India’s economy grew by 6.2% in the December quarter, recovering from a seven-quarter low, though below last year’s pace.
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