India’s manufacturing PMI increased to 54.9 in February, a slight improvement from January's 54.0, signalling a stronger improvement of the sector. "The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index® (PMI®) was at 54.9 in February, up from 54.0 in January and signalling a stronger improvement in the health of the sector. Growth has now been seen in each of the latest eight months, with the headline figure remaining above its long-run average of 53.6," stated IHS Markit in its report.
The report added that firms responded to strong increases in new work intakes by lifting production, input buying and stocks of purchases. Employment fell at the softest pace and favourable demand conditions improved sentiments to its strongest since October. Demand for raw materials strengthened to lead to another marked rate of input price inflation.
There was a faster uplift to new business inflows. “Anecdotal evidence pointed to supportive demand conditions and higher sales to both new and existing clients. Similarly, demand from international clients rose moderately and at the quickest pace for three months,” the report added.
Sustained sales growth saw a further upturn in the output in February. The rise in production was the eighth in successive months.
“There were some signs of capacity pressures at Indian manufacturers, with backlogs rising marginally. Despite this, and a pick-up in demand, employment decreased. The overall rate of job shedding was only fractional, however,” the report added.
Buying activity was higher in February for Indian manufacturers due to higher output in new order inflows. “Greater purchasing activity and expectations of higher output in the months ahead led to a solid rate of pre-production inventory growth,” said the report, further adding that the rate of growth was sharp, but moderated for the third successive.
IHS Markit added that pandemic restrictions delayed delivery time but the extent of deterioration in supplier performance was only mild.
Also read: India’s manufacturing PMI falls to four-month low in Jan at 54