Indian manufacturing activity improved in the month of February, as firms responded to strong increases in new work intakes by lifting production, input buying and stocks of purchases. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - surged to 54.9 in February from 54.0 in January.
The report further noted that central to the expansion was a faster uplift in new business inflows. Similarly, demand from international clients rose moderately and at the quickest pace for three months. Sustained sales growth supported a further upturn in manufacturing sector output in February. The rise in production was the eighth in successive months and quickened from that seen in January.
However, there were some signs of capacity pressures at Indian manufacturers, with backlogs rising marginally. Despite this, and a pick-up in demand, employment decreased. With pandemic restrictions and supply issues persisting, delivery times lengthened again. The extent of the deterioration in supplier performance was, however, only mild.
On the price front, February's survey showed a further increase in average input costs faced by Indian manufacturers. Purchase price inflation was sharp, but softened to a six-month low. Part of this additional cost burden was passed on in the form of higher selling charges, though the rate of increase was modest.
