HSBC India Manufacturing PMI Hits Four-Month High

Bengaluru, India – HSBC India Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, indicated that India’s manufacturing sector regained momentum in February, expanding at its fastest pace in four months. The PMI is influenced by strong domestic demand that drove a surge in new orders and output, despite the declining pace of export growth. The latest data showed the index rising to 56.9 in February from 55.4 in January. Although marginally lower than the initial figure of 57.5, the reading was still well above the 50 mark which is used to distinguish between expansion and contraction.

The upbeat factory numbers reinforce signs of resilience in the broader economy. India experienced good growth of 7.8 percent in the October-December quarter, partly due to the strong increase in manufacturing output (13.3 percent). The country is expected to close the fiscal year with growth of around 7.6 percent. Manufacturing activity accelerated in February, supported by stronger domestic orders, and the output expanded at a faster rate for the second straight month. However, slower export growth remains a concern, with new overseas orders rising at their weakest pace in 17 months amidst global trade uncertainties.

On the ground, companies reported enhanced efficiency, consistent demand, and technological investment that are turning up production. The input costs were moderate, and companies increased selling prices at the fastest rate in four months, bolstered by strong demand. Employment recovery was slightly higher, but there was strong improvement in business confidence at a four-month peak, indicating cautious optimism amid the weakened global demand.

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