India's Manufacturing PMI Jumps To 56.9 In Feb From 55.4 In Jan

RunWithRugs · 2026-03-05T00:02:41+00:00

India's manufacturing sector showed strong growth in February, driven by increased domestic demand, with the PMI rising to 56.9. While new orders surged, export growth slowed significantly, impacting employment. Business confidence remains positive for future output.

RunWithRugs

2026-03-05 00:02:41

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(MENAFN- KNN India) ** New Delhi, Mar 2 (KNN)** India’s manufacturing sector strengthened in February, driven by robust domestic demand, even as export growth slowed to a 17-month low.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) rose from 55.4 in January to 56.9 in February, marking a four-month high and signalling a solid improvement in business conditions.

Pranjul Bhandari, Chief India Economist, HSBC, said, "India’s final manufacturing PMI reflected an acceleration in manufacturing activity in February. Output expanded at a faster rate for a second month, supported by stronger domestic orders.”

“However, growth in new export orders continued its slowing trend that began in mid-2025, somewhat restricting employment creation in the manufacturing sector," he added.

** Output, Orders and Costs**

Manufacturers reported a sharp rise in new orders, the strongest since October, supported by marketing efforts and rising client demand.

Production expanded at the fastest pace in four months, aided by efficiency gains, healthy order books and technology investments.

In contrast, new export orders grew at their slowest rate in nearly a year-and-a-half, though firms reported gains from Asia, Europe, the Middle East and the US.

Stronger order inflows prompted firms to raise input purchases at the fastest pace in three months and build inventories. Pre-production stocks rose sharply, well above the long-run trend.

Input cost inflation remained moderate and unchanged from January, with higher spending on labour, materials and transport. However, output price inflation accelerated and exceeded its historical average as companies sought to protect margins.

Employment increased for the fourth straight month, albeit marginally, and at the quickest pace in four months. Backlogs rose to a seven-month high, while supplier delivery times improved, indicating limited pressure on capacity.

** Outlook**

Business confidence for the year ahead remained upbeat. Around 16 per cent of firms expect output to rise, while fewer than 1 per cent foresee a decline, supported by favourable demand conditions and continued marketing initiatives.

** (KNN Bureau)**

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