India PMI Data: Manufacturing Activity Expands At A Slower Pace In February

India’s manufacturing activity expanded at a slower pace in February compared to a month ago as new orders fell.

The Nikkei India Manufacturing Purchasing Managers’ Index stood at 54.5 in February compared to 55.3 in January and 54.3 a year ago, according to IHS Markit's statement. This was the 31st straight month when India’s manufacturing PMI remained above the 50-point mark. In PMI parlance, a print above 50 signals expansion while a score below that mark denotes contraction.

According to IHS Markit, the “strong" manufacturing sector expansion seen in India at the start of the year was maintained in February, with rates of growth for factory orders, exports and output holding close to January’s recent highs. While firms were willing to step up raw material purchases, hiring activity increased marginally.

“Factories in India continued to benefit from strong order flows in February, from both the domestic and international markets,” said Pollyanna de Lima, principal economist at IHS Markit. “The pick-up in demand meant that companies were able to further lift production and input buying at historically-elevated rates.”

She, however, said the outbreak of the coronavirus was ringing “alarm bells” for Indian producers as it poses threats to their supply chains and exports. “Businesses became less confident about the year-ahead outlook for output, in turn restricting hiring activity.”

The uptick in manufacturing activity comes days after the country’s core sectors recorded a 2.2 percent growth in January helped by expansion in production of coal, refinery products and electricity.