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India's Manufacturing PMI Hits 4-Month High of 56.9, Export Growth Slows

India's manufacturing activity strengthened in February, with the HSBC Purchasing Managers' Index rising to a four-month high of 56.9. The improvement was fueled by a substantial increase in domestic demand, leading to the strongest expansion in production volumes since October. However, the growth in new export orders eased to its slowest pace in 17 months. Despite the export moderation, firms remained optimistic, increasing input purchasing, inventories, and hiring in response to rising workloads.

Key Points: India Manufacturing PMI Rises to 56.9, Export Growth Slows

  • PMI at 4-month high of 56.9
  • Strong domestic demand drives growth
  • Export order growth slows to 17-month low
  • Output rises at fastest pace in 4 months
  • Firms increase hiring and purchasing
2 min read

India's manufacturing PMI rises to four-month high of 56.9 in February, export growth slows to 17-month low

India's manufacturing PMI rose to a four-month high of 56.9 in February, driven by strong domestic demand, while export growth eased to a 17-month low.

"One area where growth took a step back was new export orders. February's increase was the slowest in 17 months - HSBC Report"

New Delhi, March 2

India's manufacturing activity strengthened further in February, with the Purchasing Managers' Index rising to a four-month high of 56.9 from 55.4 in January, according to data released by HSBC.

However, the data report noted that the pace of growth in new export orders eased to its slowest in 17 months.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) - a gauge of overall conditions derived from measures of new orders, output, employment, supplier delivery times and stocks of purchases.

HSBC said that the PMI numbers "rose from 55.4 in January to a four-month high of 56.9 in February. The latest figure was consistent with a marked improvement in the health of the sector"

The survey showed that a substantial improvement in domestic demand for Indian goods fuelled new order intakes and led to the strongest expansion in production volumes in four months. Goods producers indicated that demand buoyancy, marketing initiatives and rising client requirements underpinned another increase in new business intakes. The pace of growth was described as historically elevated and the strongest since last October.

Output also rose at the fastest pace in four months and was above its long-run average. According to panel members, efficiency improvements, healthy underlying demand, rising intakes of new work and technology investment collectively boosted production volumes.

In response to increasing workloads, firms stepped up input purchasing, raised their inventories and hired additional staff, reflecting confidence in sustained demand conditions.

However, the survey noted that new export orders saw a softer expansion. February's rise in external sales was the slowest in 17 months, with the pace of growth broadly converging towards its long-run average. Where export sales increased, companies cited gains from Asia, Europe, the Middle East and the US.

It stated "One area where growth took a step back was new export orders. February's increase was the slowest in 17 months".

Despite the moderation in export growth, the overall outlook remained positive. Year-ahead assessments of output volumes continued to reflect optimism, with 16 per cent of companies forecasting growth and fewer than 1 per cent anticipating a reduction.

So the February PMI data highlighted strong domestic demand momentum supporting manufacturing activity, even as export growth showed signs of easing.

- ANI

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Reader Comments

P
Priya S
Good to see the positive numbers, but the slowdown in export growth to a 17-month low is a bit worrying. Global demand seems to be softening. We need to diversify our export markets more aggressively and not rely only on traditional partners.
R
Rohit P
The hiring of additional staff mentioned is the best part. If factories are hiring, it means more jobs for our youth. That's the growth we want to see - not just numbers on a page, but real employment on the shop floor. đź‘Ť
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Michael C
As someone who follows global economics, India's sustained PMI above 55 is impressive, especially when many major economies are struggling. The domestic demand engine is powerful. However, the export slowdown needs attention - it's a key indicator of global competitiveness.
S
Shreya B
While the headline number is good, I hope this growth is inclusive and reaches the MSME sector too. Often these surveys focus on larger firms. The real test is whether the small business owner in a tier-2 city is also seeing this "marked improvement".
D
David E
The technology investment mention is crucial. For long-term growth, Indian manufacturing needs to keep moving up the value chain. Strong domestic demand provides the perfect base for this innovation. Exciting times ahead if this trend continues.

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