India Factory Output Hits 5 Month Low in Feb

India’s Factory activity expanded at its slowest pace in five months in February as a slowdown in new orders dragged on overall output, according to HSBC Manufacturing Purchasing Managers’ Index (PMI) survey.

The manufacturing activity survey, HSBC Manufacturing Purchasing Managers’ Index, compiled by Markit, fell for the second consecutive month, to 51.2 in February from 52.9 in January.

A reading above 50 separates growth from contraction.

The new orders sub-index fell to 51.9, the lowest level in five months, from January’s 54.4. The drop underscored softer domestic demand, which also accounted for a slight cut in headcount at firms.

The seasonally-adjusted output index also fell to its lowest since September. Indeed, February marks the 16th straight month of factory activity expansion and if India can grow as strongly in the coming fiscal year as the government said in its newly-released budget – expanding by up to 8.5 percent – that should boost manufacturing.

Output prices, or the inflation on goods for consumers, rose at the weakest rate in five months as manufacturers offered discounts to secure new business, according to a press statement released by Markit.