Despite strong growth in new orders, job creation in manufacturing, which according to the PMI hit its slowest pace since September 2022 in January, dropped further to grow only partially in February. Image for representation. , Photo Credit: Reuters
In February, India’s manufacturing sector clocked 20 th According to the survey-based seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI), consecutive months of production growth and new orders, most of which were driven by the domestic market, as export order growth slowed to an 11-month low. level was reached.
The index stood at 55.3 in February, marginally down from 55.4 in January. A reading over 50 on the index indicates an increase in activity.
Input costs rose at the fastest pace in four months in February, with firms citing higher prices for electronic components, energy, food, metals and textiles. However, 94% of producers chose to absorb higher costs rather than pass them on to buyers, and total output charges rose at the slowest rate in three months.
Despite strong growth in new orders, job creation in manufacturing, which according to the PMI hit its slowest pace since September 2022 in January, dropped further to grow only partially in February.
“Companies indicated only mild pressure on their operating capacities, with a marginal increase in outstanding business in February. As a result, there was little change in the overall job count. In fact, 98% of the panellists reported no change in employment,” said S&P Global.
“Job creation failed to gain meaningful traction, however, as firms had enough employees to deal with current needs. In fact, there was a modest increase in their backlogs,” said Pollyanna De Lima, associate director of economics at S&P Global Market Intelligence. explained, “Suppliers have sufficient capacity to accommodate rising input demand, which is shown by the stabilization in delivery times.”
Business confidence improved in February, according to the PMI, with firms expecting firm demand, new product releases and investment showing good signs of growth prospects.
“The PMI results suggested that most of the jump in new orders welcomed by firms was domestically driven as international sales grew at a modest pace that was the weakest in nearly a year,” Ms de Lima said. He also said that companies were confident that demand would remain resilient as they kept adding to their inventories by buying additional inputs.