Manufacturing Growth Softens

India's red-hot manufacturing sector cooled off a little in February as the slew of monetary and fiscal measures taken by the Government started to have a moderating effect on new business.

The seasonally adjusted Purchasing Managers' Index (PMI) declined to 53.6 in February, its lowest since the PMI survey started in April 2005. It was at 55.3 in January. The index has declined steadily since peaking at 59.3 in October.

The new orders index fell to 56.5 in February, also the lowest in the survey's history, from 59.7 in January. The new export orders index also slipped to its lowest in the survey's history at 51.2.

Higher prices of raw materials like metals, chemicals and coal, pushed up the input price index to 54.2 from 52.9 in January. Lower demand also hurt manufacturers' pricing power. The output price index fell to its lowest in 18 months to 50.5 from 50.7 in January.

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