Flash PMI signals February fervour for India Inc.

Car panels are welded using robotic machines at the manufacturing plant of Maruti Suzuki in Manesar, in the northern state of Haryana, India. | Photo Credit: ANUSHREE FADNAVIS

Output levels and new orders for Indian manufacturing and services firms rose at a seven-month high pace in February, as per the HSBC India Flash PMI (Purchasing Managers’ Index), with fresh contracts for services players growing at the fastest pace in a decade. 

The PMI for Manufacturing rose to 56.7 in February, as per the Flash reading, which provides an advance indication of trends in an ongoing month, compared to 56.5 PMI print in January. For services, the flash PMI stood at 62 this month, from 61.8 last month. A PMI reading of over 50 indicates an expansion in business activity levels. 

While the pace of increase in input prices this month has been the slowest in three and a half years, goods cost dropped at a faster pace for goods producers. For services firms, there was some pressure on labour costs, likely led by overtime payments in the face of rising demand for services.

“Amid all this optimism, production timeliness is one area which may need monitoring. There has been some slip up here for the last six months,” HSBC economists Pranjul Bhandari and Aayushi Chaudhary said in a note.