Despite the fall, the headline figure remained well above the 50-mark separating growth from contraction for the 19th straight month.
January data showed a further improvement in the health of the Indian manufacturing industry. There were slower increases in total sales and output, but rates of expansion remained historically elevated. New export orders rose only slightly, however, and at the weakest pace in ten months. Companies sought to add to their input inventories by purchasing additional materials, but headcounts were broadly unchanged amid sufficient staff numbers to cope with current requirements.
Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said: The manufacturing industry started 2023 on a firm footing, with a robust increase in new work intakes underpinning a further expansion in production.
Despite some loss of growth momentum, the sector looks set to at least remain in expansion mode as the final quarter of the current fiscal year draws to a close. Rising backlogs and the purchasing of additional inputs suggested that companies will continue to lift output in the coming months. Less challenging supply-chain conditions meant that firms were able to secure critical inputs and rebuild their inventories as intended.
A key area of weakness seen in the latest PMI data was exports. Although manufacturers received new orders from international markets, the increase was slight at best and moderated considerably to a ten-month low.
There was a mild resurgence in cost pressures, which manufacturers linked to higher prices for items like energy, metal and electronic components. The rate of cost inflation remained historically subdued, but companies nevertheless hiked their fees as demand resilience facilitated the passing on of additional cost burdens to clients.
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