New Delhi, Mar 3 (KNN) India’s manufacturing activity eased to a 14-month low of 56.3 in February from 57.7 in the previous month, data released by S&P Global on Monday showed.

The drop was attributed to mild loss of momentum in new orders and production. The manufacturing PMI is still indicative of a further robust improvement in the health of the sector.

Pranjul Bhandari, Chief India Economist, HSBC, said, “India recorded a 56.3 manufacturing PMI in February, down slightly from 57.7 during the prior month, but still firmly within expansionary territory.”

Per the survey, despite slowing to the weakest since December 2023, rates of expansion in output and sales remained elevated in the context of the survey’s 20-year history.

While domestic and international demand remained favourable, which prompted firms to increase purchasing activity and hire extra workers at above-trend rates, demand buoyancy kept charge inflation at an elevated level despite softer cost pressures.

While there was an increase in purchasing activities, the pace of expansion eased to a 14-month low.

S&P Global maintained that the February data showed a forty-fourth consecutive rise in new business intakes, which panel members linked to strong client demand and efforts to price better than their competitors.

The overall pace of growth receded to the slowest since December 2023, but was above its long-run average, it maintained.

Though softer than January’s near 14-year high, February saw strong growth in new export orders as manufacturers continued to capitalise on robust global demand for their goods.

In response to this, manufacturers continued to expand their workforce in February. The rate of job creation was the second-best in the series history, behind only that recorded in January, the survey stated.

“One-in ten firms signalled greater recruitment activity, while 1 per cent of companies shed jobs,” it added.

Manufacturers faced another rise in input costs, with frequent reports of greater bamboo, leather, marketing, rubber and telecom prices. Encouragingly, the overall rate of inflation eased for the third straight month to its weakest in a year.

Concurrently, the rate of charge inflation was little-changed from January, remaining above both its long-run average and that seen for input costs.

For the coming year, firms said, there was strong optimism about growth prospects with client demand expected to remain positive and support output.

“Unfinished business rose further in February, as demand growth continued to outpace increases in production. The rate of backlog accumulation was slight, but nevertheless reached its highest since January 2024,” S&P Global said.

(KNN Bureau)