PMI: India’s manufacturing sector growth hits 14-month low in February, PMI figures released

New Delhi| India’s manufacturing sector growth fell to a 14-month low in February amid new orders and slow growth in production. This information was given in the monthly survey report of PMI on Monday. The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) peaked at 56.3 in February, down from 57.7 in January. However, PMI data remained within the ‘expanding’ area. In the language of PMI, a digit above 50 represents an expansion, while a digit below 50 represents a decline.

“While output growth has fallen to its weakest level since December 2023, the overall momentum in India’s manufacturing sector remained broadly positive in February”, said Pranjul Bhandari, chief Indian economist at HSBC Although slower than its January 14-year high, the pace of expansion remained buoyant, the survey said. New export orders grew strongly in February, the survey said, as manufacturers continued to take advantage of strong global demand for their goods.

Furthermore, favorable domestic and international demand led companies to increase purchasing activity and hire additional workers. “Business expectations also remained very strong, with about a third of survey participants expecting higher output in the coming year”, Bhandari said.

On the employment front, manufacturers continued to increase the number of their workforce in February. The rate of job creation was the second best rate in the series’ history, behind the rate recorded in January. “One in ten companies indicated more recruitment activity, while one percent of companies lost jobs”, the survey said.

February saw the slowest increase in cost weights in a year, but inflation remained high as demand rebounded, according to the survey. HSBC India Manufacturing PMI is compiled from the responses to a questionnaire sent by S&P Global to purchasing managers in a panel of around 400 manufacturers. On the economic front, the Indian economy grew at 6.2 per cent in the December quarter, recovering successively from a seven-quarter low, but expansion remained subdued compared to the previous year.

For the full FY 2024-25 (April 2024 to March 2025), the government has now projected GDP growth to be 6.5 percent. This is slightly higher than the earlier estimate of 6.4 per cent, but lower than the revised growth rate of 9.2 per cent for 2023-24.