India's manufacturing sector activity continued to expand in January, with the HSBC Purchasing Managers' Index (PMI) for the sector coming in at a four-month high of 56.5, data released on February 1 showed.
At 56.5, the January manufacturing PMI is lower than the flash PMI of 56.9 released on January 24, but is above the key level of 50, which separates expansion in activity from contraction, for the 31st month in a row.
"India's final manufacturing PMI showed that manufacturing activity accelerated in January," said Ines Lam, an economist at HSBC.
"Current output expanded on robust demand, with domestic orders growing at a faster pace than export orders. The input price index inched up, but manufacturers were able to pass on some of the cost pressures to consumers, as suggested by the small rise in the output price index," Lam added.
According to S&P Global, which compiles the index, new orders for Indian manufacturers rose the most in four months in January, with export orders increasing the most since October.
On the price front, input cost inflation was at a three-month high, although it was moderate and "among the weakest seen in three-and-a-half years". Consequently, the prices charged to customers also increased to a three-month high in January and were in line with its long-run average.
While the rise in orders put pressure on manufacturers' capacities, most firms surveyed by S&P Global did not add jobs in January.
"Finished goods stocks continued its descent in January, with surveyed firms largely suggesting that orders had been met from inventories," it added.
On the whole, with new product inquiries, diversification, and demand strengthening, business confidence rose in January.
"Panellists were at their most upbeat towards the year-ahead outlook for output in 13 months," S&P Global said.
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