Manufacturing sector growth eased slightly in February: PMI

NEW DELHI: India’s manufacturing activity declined to a fourmonth low in February but remained within the expansion zone with companies upping hiring, a private survey showed on Wednesday.

The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) fell to 52.1 in February from 52.4 in January. In December 2017, the index had touched a 60-month high of 54.7.

This is for the seventh consecutive month that the index remained above the 50-point mark, which separates expansion from contraction.


“It was promising to see that India's manufacturing sector remained in growth territory, as the impact of July's Goods and Services Tax continues to dissipate,” said Aashna Dodhia, economist at IHS Markit and the author of the report.

In response to greater production requirements, companies raised their staffing levels during February. Although modest, the pace of job-creation was slightly faster than January.

On the prices front, the survey said that cost inflation accelerated to the sharpest since February 2017, adding to expectations that inflationary risks will continue over the coming months.

IHS Markit upgraded its Consumer Price Index (CPI) forecast to 5.2% for financial year 2017-2018 amid a stronger oil price outlook and growing fiscal risks.

“Cost inflation accelerated to the sharpest since February 2017, adding to expectations that inflationary risks will continue over the coming months,” Dodhia said. The survey further noted that Indian manufacturers remained optimistic towards the 12-month outlook for output in February.