India's Manufacturing PMI Expands To Five-Month High In February

Growth in India’s manufacturing sector further gained momentum near the end of the current fiscal due to increase in production and new orders, according to a private survey.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index rose from 56.5 in January to 56.9 in February. The latest reading pointed to the strongest improvement in the health of the sector since September 2023.

Production rose at the fastest pace in five months, fueling the quickest increase in sales since last September and the strongest expansion in new export orders in 21 months.

Input costs, meanwhile, increased only fractionally, with the rate of inflation subsiding to the weakest in the current sequence of inflation that stretches back to August 2020.

Prices charged by Indian manufacturers increased at a slower rate, the joint-weakest since March 2023.

Despite the uptick in growth momentum, manufacturing employment in India was little-changed halfway through the final fiscal quarter. Goods producers mentioned that payroll numbers were sufficient for current requirements.

Finally, February survey data indicated sustained optimism among manufacturers regarding the year-ahead outlook for production. The overall level of confidence was the second-highest since December 2022.