Indian manufacturing activity growth slowed in the month of February 2020, with the latest rise in jobs was the weakest in three months and only fractional overall. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance -eased to 54.5 in February from 55.3 in January. Nevertheless, despite a slight slowdown, the manufacturing sector activity expanded as the PMI reading stood above the watershed 50 mark, which differentiates growth from contraction.
The report found that manufacturing production increased at a similar pace to January's 91-month high, as firms reacted positively to new business gains and favourable market conditions. Growth was led by consumer goods makers, followed closely by intermediate goods producers. Aggregate new orders increased sharply in February, with growth little-changed from January's recent high, on the back of successful marketing campaigns, strengthening demand and supportive economic conditions.
Further, exports contributed to the expansion in total sales, with Indian companies noting the second-strongest improvement in international demand for their goods since November 2018. There was a notable rise in new orders from abroad at consumer goods producers and modest gains in the intermediate and capital goods sectors. At the same time, the rate of input cost inflation remained negligible in the context of historical data. Meanwhile, business sentiment faded on the back of concerns regarding the impact of the COVID-19 outbreak on exports and supply chains.
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