Manufacturing Growth in India Slows, Yet Remains Robust in February: Report

New Delhi, March 3 (NationPress) The Indian manufacturing sector's impressive momentum in 2025 persisted through February. Although it decelerated to the weakest level since December 2023, the rates of growth in output, employment, and sales remained high relative to the long-term average, as indicated by the HSBC survey published on Monday.

Strong domestic and international demand prompted businesses to boost purchasing activities and increase hiring at rates exceeding the norm. Despite this demand surge, charge inflation remained significantly elevated, although cost pressures softened, according to the HSBC Manufacturing Purchase Manager’s Index survey.

“India achieved a manufacturing PMI of 56.3 in February, a slight dip from 57.7 in the previous month, yet firmly within the expansion zone. Sustained global demand has driven growth in the Indian manufacturing sector, resulting in increased purchasing activities and job creation,” stated Pranjul Bhandari, Chief India Economist at HSBC.

“Furthermore, business confidence remained robust, with nearly one-third of survey participants anticipating higher output levels in the upcoming year,” Bhandari noted.

Conditions for businesses improved across all three monitored categories: consumer, intermediate, and investment goods. Output increased midway through the final fiscal quarter, extending the growth streak to 44 months. Where growth was observed, manufacturers reported ongoing improvements in demand, technological investments, and the initiation of new projects. Although the overall rate of expansion was significant, it eased to the slowest level since December 2023, the survey revealed.

Data for February indicated a 44th consecutive rise in new business intakes, which panel members attributed to strong client demand and competitive pricing strategies.

While the overall growth rate slowed to the weakest since December 2023, it remained above the long-run average. New export orders saw substantial growth in February as manufacturers leveraged strong global demand for their products. Although less vigorous than January's near 14-year peak, the pace of expansion remained sharp, according to the survey.

In response to the influx of new orders, manufacturers continued to increase their workforce numbers in February, marking a year of continuous employment growth. The job creation rate was the second-highest in the survey's history, following only January's figure.

One in ten firms reported increased hiring activity, while just 1 percent noted job cuts. Manufacturers heightened their purchasing activities, although the expansion rate dipped to a 14-month low. Those reporting growth indicated that robust client interest prompted them to replenish stocks and guard against potential input shortages. Consequently, pre-production inventories rose significantly again in February, supported by a 12th consecutive improvement in average lead times, the survey added.