Macroscope – Purchasing Managers’ Index (PMI) Manufacturing PMI for the month February 2021

What is the latest Manufacturing PMI reading?

India Manufacturing PMI recorded 57.5 in February vs 57.7 in January. In October, it recorded the highest figures in 12 years at 58.9. Remaining flat-to-positive, the index remained above its long-run average of 53.6. The PMI reading has maintained growth trajectory for 7th month in a row.

A reading above 50 denotes expansion and below 50 denotes contraction.

The Indian manufacturing sector continues to remain on the right path to recovery aided by recovering domestic demand and successful marketing campaigns which helped increase new orders in Feb 2021. Input inventories rose to the strongest pace in the survey’s history as companies reacted to rising production needs lifting purchasing
activity.

Robust demand for input goods led suppliers to hike their fees. The increase in the prices of products such as chemicals, metals, plastics and textiles led to overall rate of cost inflation to hit a 32-month high. Although factory gate charges increased, the rate of inflation was modest and eased from 13 month high in January.

Payroll numbers however fell for the eleventh straight month, due to government guidelines to contain the Covid-19 pandemic spread by implementing working in shifts.

Global PMI Manufacturing Index Summary:

Global manufacturing output rose a slightly quicker pace in Feb 2021, despite growth of new orders easing to a five-month low. Although the trend in international trade remained relatively subdued, the rate of expansion in new export business nonetheless gathered pace.

Optimistic growth projections reflected forecasts of an improvement in economic conditions and the lifting of restrictions as the vaccination programme expands.

Vaccination programme widening will be instrumental in printing healthier manufacturing in times to come. With business optimism at highest for 3 months in a row, expectations of gradual improvement in economic conditions can translate into output growth.

Click here If you want to read the complete Manufacturing PMI IHS Markit press release