Despite robust growth in new orders, job creation in the manufacturing sector, which had reached the slowest pace in January since September 2022 according to the PMI, fell further to grow only slightly in February. Image for representation. | photo credit: Reuters
In February, India’s manufacturing sector recorded the 20 e successive month of production growth and new orders, most of which was driven by the domestic market as export order growth hit an 11-month low, according to the S&P Global India Manufacturing Index Purchasing Managers’ Index (PMI) seasonally adjusted based on survey.
The index was at 55.3 in February, slightly below January’s 55.4. A reading of over 50 on the index indicates growth in activity.
Input costs rose at the fastest pace in four months in February, with companies citing higher prices for electronic components, energy, foodstuffs, metals and textiles. However, 94% of producers chose to absorb the higher costs rather than pass them on to buyers, and overall production costs rose at the slowest rate in three months.
Despite robust growth in new orders, job creation in the manufacturing sector, which had reached the slowest pace in January since September 2022 according to the PMI, fell further to grow only slightly in February.
“Companies reported only slight pressure on their own operating capacities, with outstanding business increasing slightly in February. As a result, there was little change in the total number of jobs. Indeed , 98% of panelists reported no change in employment,” S&P Global said.
“Job creation, however, failed to gain traction as companies apparently had enough staff to meet current demands. Indeed, there was only a marginal increase in their arrears. Suppliers also seemed to have sufficient capacity to meet the growing demand for inputs, as evidenced by the stabilization of delivery times,” explained Pollyanna De Lima, associate director of economics at S&P Global Market Intelligence.
Business confidence improved in February as companies expect strong demand, new product launches and investment to bode well for growth prospects, according to the PMI.
“The PMI results suggest that most of the recovery in new orders welcomed by businesses was domestic in origin, with international sales growing at a marginal pace that was the weakest in nearly a year,” said Miss DeLima. She also noted that companies were confident that demand would remain resilient as they continued to increase inventory by purchasing additional inputs.