Manufacturing activity surges at fastest pace in four months in February: PMI survey shows

Manufacturing activity in India surged at its fastest pace in four months in February, driven by domestic demand for goods amid a mild uptick in international orders, S&P Global said on Monday, citing its seasonally adjusted manufacturing purchasing managers’ index.

S&P Global said that a major improvement in domestic demand for Indian goods fuelled new order intakes and spurred the greatest upturn in production volumes in four months.

The market intelligence provider said in a statement that its seasonally adjusted HSBC India PMI, a gauge of overall conditions derived from measures of new orders, output, jobs, supplier delivery times and stocks of purchases, rose from 55.4 in January to a four-month high of 56.9 in February.

The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease.

The survey is based on responses from around 400 manufacturers. Survey responses are collected in the second half of each month and indicate the direction of change compared to the previous month.

Export growth slows

International sales expanded at a comparatively mild pace in February, and one that was the weakest in close to a year-and-a-half, the statement said.

One area where growth took a step back was new export orders, the company said, adding it was the slowest growth in 17 months, with the rate of expansion broadly converging towards its long-run average.

"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," the statement quoted Pranjul Bhandari, chief India economist at HSBC, as saying.

Domestic demand leads

Goods producers indicated that demand buoyancy, marketing initiatives and rising client requirements underpinned another expansion in new business intakes. The pace of growth was the strongest since last October.

Manufacturing output also rose at the fastest pace in four months and at a rate above its long-run average, S&P said.

According to survey responses, efficiency improvements, healthy underlying demand, rising intakes of new work and tech investment collectively boosted production volume.

Hiring, cost trends

In response to increasing workloads, firms stepped up sourcing of inputs, lifted their inventories and hired extra workers.

Cost pressures remained benign, rising at a moderate rate that matched levels seen in January. Output charge inflation ticked higher and outpaced its long-run average, S&P Global said.

The latest figure was consistent with a marked improvement in the health of the sector, it said.

GDP alignment

Manufacturing activity growth projected in the survey is in line with the government’s projection of 7.6% real GDP growth in the current financial year, which requires a 7.3% growth in the March quarter.

The new GDP series released by the statistics ministry on Friday, with 2022-23 as the base year, showed that India’s manufacturing sector emerged as a key driver of growth over the past three financial years. The sector’s output expanded 12.7% and 9.3% in FY24 and FY25 respectively and is expected to grow 11.5% in the current financial year, as per official data.