Jakarta: The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index® (PMI®) was at 54.9 in February, up from 54.0 in January and signalling a stronger improvement in the health of the sector.
Growth has now been seen in each of the latest eight months, with the headline figure remaining above its long-run average of 53.6.
"Latest PMI data for India's manufacturing sector revealed an improvement in operating conditions in February. Output and new orders expanded at stronger rates, while buying activity continued. At the same time, sustained increases in backlogs could lead to higher employment levels in the months ahead should capacity pressures continue," IHS Markit Economist Shreeya Patel said in a press release on Wednesday.
"There were, however, some key concerns that continued to threaten growth. Most prominently, costs pressures remained elevated as a result of shortages
while delivery times lengthened once again. However, a key threat to manufacturers comes from only marginal increases in selling prices. Despite expenses rising sharply, firms passed on only part of this burden to clients, suggesting pressure on profit margins," Patel added.
Meanwhile, business sentiment improved sharply midway through the quarter, underpinned by business expansion plans, a return to normality and hopes for fruitful marketing.
The degree of optimism remained below its long-run average, however.
"For now, India's manufacturing sector has weathered the storm of the Omicron variant, undoubtedly supported by the relatively high inoculation rate. Moreover, demand conditions showed notable signs of resilience and price pressures somewhat receded," Patel concluded.
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