India’s manufacturing sector growth slips to 14-month low in February

India’s manufacturing sector growth fell to a 14-month low in February amid softer increase in new orders and production, a monthly survey said on Monday.

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The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) registered 56.3 in February, down from 57.7 in January, but remained firmly within the 'expansionary' territory.

In PMI parlance, a print above 50 means expansion, while a score below 50 denotes contraction.

"Although output growth slowed to the weakest level since December 2023, overall momentum in India's manufacturing sector remained broadly positive in February," said Pranjul Bhandari, Chief India Economist at HSBC.

Although softer than January's near 14-year high, the pace of expansion was sharp, the survey said, adding that new export orders rose strongly in February, as manufacturers continued to capitalise on robust global demand for their goods, the survey said.

Moreover, favourable domestic and international demand prompted firms to increase purchasing activity and hire extra workers.

"Business expectations also remained very strong, with nearly one-third of survey participants foreseeing greater output volumes in the year ahead," Bhandari said.

On the job front, manufacturers continued to expand their workforce numbers in February. The rate of job creation was the second-best in the series' history, behind only that recorded in January.

"One-in ten firms signalled greater recruitment activity, while 1 per cent of companies shed jobs," the survey said.

According to the survey, February witnessed the slowest rise in cost burdens in a year, but demand buoyancy kept charge inflation at an elevated level.