India’s manufacturing activity slowed to a 14-month low of 56.3 in February, down from 57.7 in January, as new orders and production lost some momentum, according to a private sector survey released on March 3.
“India’s manufacturing PMI fell slightly to 56.3 in February from 57.7 in the previous month but remains firmly in expansion territory,” said Pranjul Bhandari, chief India economist at HSBC.
The HSBC India Manufacturing Purchasing Managers’ Index (PMI) also dipped below the 56.8 average recorded in the previous quarter.
Also read | Dixon Tech Q3 Results: Net Profit Jumps 77.5% YoY to ₹171.19 Crore
Slower Demand and Job Growth
While companies reported an increase in new export orders, demand was softer compared to January. Employment growth also slowed, with only one in ten firms increasing their workforce, while 1 percent reduced jobs, according to HSBC.
Producers faced rising input costs but were able to pass on these higher expenses to consumers due to stronger demand.
Positive Outlook Despite Slowdown
Despite the slowdown in manufacturing activity, business sentiment remained positive, with firms expecting robust demand to drive growth over the next year.
India’s broader economic growth is improving—GDP expanded by 6.2 percent in the third quarter, up from a near two-year low of 5.6 percent in the previous quarter. The government projects annual growth to reach 6.5 percent, up from an earlier estimate of 6.4 percent.
Manufacturing Sector Underperforms
However, the manufacturing sector continues to underperform, with growth expected to decline to 4.3 percent in the current fiscal year, compared to 12.3 percent in the previous year.
As a share of GDP, manufacturing slipped to 15.7 percent, falling below the 16 percent average recorded over the past 15 years.
For more such latest updates, click here.
