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Growth in India's manufacturing activities fell to a five-month low in February, mainly because of subdued output and new orders, showed the widely tracked HSBC Purchasing Managers’ Index (PMI). Some manufacturing companies expected to be drivers in job creation reduced their workforce during the month, albeit marginally.
Manufacturing PMI, at 52.9 the previous month, in February declined to 51.2 points — the lowest since September last year. This means factory production rose but at the slowest pace in five months. A reading above 50 denotes expansion, while one below that implies contraction.
The slowdown is broad-based by sector, with softer increases recorded in the consumer, intermediate and investment goods sub-sectors, a commentary associated with the PMI survey said.
Despite it being a 16th straight month of expansion, February saw new orders growing at the slowest pace since September. Growth of new work intakes was stymied by softer domestic demand, Markit Economics, which compiles the PMI data, said.
Pollyanna De Lima, an economist at Markit, said: “Manufacturing growth in India lost momentum in February, with output and new orders expanding at rates softer than those seen in the past four months.”
Additionally, the moderation in growth was evident across the three monitored market groups, Lima said.
New export business, meanwhile, increased at a solid and stronger rate. If this is also corroborated by official data, there might be a reversal in declining exports in February.
Manufacturing PMI, at 52.9 the previous month, in February declined to 51.2 points — the lowest since September last year. This means factory production rose but at the slowest pace in five months. A reading above 50 denotes expansion, while one below that implies contraction.
The slowdown is broad-based by sector, with softer increases recorded in the consumer, intermediate and investment goods sub-sectors, a commentary associated with the PMI survey said.
Despite it being a 16th straight month of expansion, February saw new orders growing at the slowest pace since September. Growth of new work intakes was stymied by softer domestic demand, Markit Economics, which compiles the PMI data, said.
Pollyanna De Lima, an economist at Markit, said: “Manufacturing growth in India lost momentum in February, with output and new orders expanding at rates softer than those seen in the past four months.”
Additionally, the moderation in growth was evident across the three monitored market groups, Lima said.
New export business, meanwhile, increased at a solid and stronger rate. If this is also corroborated by official data, there might be a reversal in declining exports in February.
With total new order growth easing further, manufacturers reduced their payroll numbers in the month. Nonetheless, the overall rate of job cuts was small, with a vast majority of those surveyed indicating no change in employment levels since January.
Sector data indicated employee headcounts were reduced across the three broad areas of the manufacturing sector.
Prices paid for inputs by goods producers in India decreased for the first time since March 2009, with declines recorded in the intermediate and investment goods sectors. The rate of decrease was, however, only marginal. The factory gate charges, however, were raised further. The overall rate of inflation was fractional and the weakest in five months, amid reports of discounting in order to secure new business.
Low inflation and higher exports brightened the prospects for a rebound in output and employment in coming months, Lima said.
