February manufacturing PMI rises to 56.9 on increased production and new orders.

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India Manufacturing Sector Shows Strong Growth in February

Finance Saathi

04/Mar/2024

The latest HSBC India Manufacturing Purchasing Managers' Index (PMI) for February reveals robust growth, hitting a 32-month high of 56.9, signaling sustained expansion in the sector. Key highlights include accelerated production and sales, driven by a notable increase in capital goods. Both domestic and international demand, particularly from countries like Australia, China, the United States, and the United Arab Emirates, contributed to this positive momentum.

India's manufacturing sector continues its upward trajectory, as indicated by the latest HSBC India Manufacturing Purchasing Managers' Index (PMI) for February. The index surged to 56.9, marking the highest reading since October and extending the streak of expansion to 32 consecutive months. This robust growth was underpinned by accelerated production and sales, with a particularly notable uptick observed in the capital goods category.

A standout feature of the report was the rapid pace of production growth, reaching its highest level in five months. This uptick was fueled by increased sales and the strongest expansion in new export orders seen in 21 months. Both domestic and global demand played a significant role in driving this positive momentum, with notable surges observed from countries including Australia, China, the United States, and the United Arab Emirates.

Despite a slightly tempered outlook for the year ahead, the report highlighted improved margins for manufacturing firms, thanks to the lowest input price inflation since July 2020. While the sector faced challenges in generating additional employment, a positive business sentiment prevailed. Moreover, cost pressures eased to their slowest pace since mid-2020, enabling firms to build up stocks of raw materials.

Of particular note is the moderation in inflationary pressures, as indicated by the output price index, which reached its joint lowest level since March 2023. This favorable scenario bodes well for the manufacturing sector in India, offering opportunities for sustained growth and stability in the months ahead.

In conclusion, the latest HSBC report underscores the resilience and dynamism of India's manufacturing sector, highlighting its ability to adapt and thrive in the face of challenges. With strong domestic and international demand driving expansion, the sector is poised for continued success in the foreseeable future.

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India Manufacturing Sector Shows Strong Growth in February

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