India’s manufacturing Purchasing Managers’ Index (PMI) for the month of February came in at 56.7 as compared to 56.5 in the previous month, up from December’s 18-month low of 54.9. According to the HSBC final India Manufacturing Purchasing Managers’ Index, compiled by S&P Global, India’s Services PMI rose to 62 from 61.8 on a month-on-month basis and composite PMI was at 61.5 vs 61.2 (MoM).
The headline HSBC Flash India Composite PMI Output Index – a seasonally adjusted index that measures the month-on-month change in the combined output of India’s manufacturing and service sectors – rose from a final reading of 61.2 in January to 61.5 in February. Growth, it said, improved in both the manufacturing (five-month high) and services (seven-month high) economies, with survey participants attributing the upturn to buoyant demand conditions, investment in technology, efficiency gains, expanded clientele and favourable sales developments. The survey also showed easing in price price pressures.
Pranjul Bhandari, Chief India Economist at HSBC, said, “The pace of acceleration in the output of India’s manufacturers and service providers, combined, was at a 7-month high in February. Encouragingly, new export orders rose sharply, particularly for goods producers. Input prices rose at the slowest pace in three-and-a-half-years. Producers were able to do both – lower the rate of increase in output prices and improve margins.”
According to the HSBC Flash India PMI, economic growth in India continued to strengthen in February, with further accelerations evident in both the manufacturing and service sectors. The rise in aggregate output, it added, was the quickest since last July, while new orders expanded at the joint-fastest pace in seven months.
On the price front, the rate of charge inflation for Indian goods and services receded to the weakest in a year as companies generally observed a lack of cost pressures. Further, input prices increased at the slowest pace in three-and-a-half years.
New orders across India’s private sector rose for the thirty-first successive months halfway through the final fiscal quarter, it said. Equal to January, the rate of expansion was sharp and the joint-best in seven months. As was the case for output, services firms noted a stronger increase in sales than their manufacturing counterparts.
International markets made a positive contribution to companies’ order books, as seen by the fastest expansion in new export work since last September. External sales, it added. were reportedly fuelled by stronger demand from clients based in Africa, Asia, Australia, Europe, the Americas and the Middle East.
The survey said that despite ongoing growth of new orders, private sector companies in India refrained from recruiting extra workers during February and payroll numbers remained unchanged since January, thereby ending a 20-month sequence of job creation.