Sub-sector data indicated that consumer goods was the best performing category, where growth rates for output and new orders surpassed those seen at intermediate goods firms.

Concurrently, the investment goods industry saw a deterioration in business conditions, with output and new orders remaining in contraction territory. Supported by a softer increase in input costs and as part of efforts to secure new work, Indian manufacturers lowered their average selling prices in February for the first time in five months. The rate of discounting was, however, only marginal.

Input costs rose for the fifth month running in February, but at the weakest rate in this sequence. Data implied that falling oil prices were offset by higher prices paid for imported raw materials such as metals, which survey members linked to the depreciation of the rupee against the US dollar.

February data highlighted broadly unchanged levels of employment across the Indian manufacturing sector. Anecdotal evidence indicated that firms held off hiring amid an increasing degree of cost-consciousness in the face of relatively soft demand conditions.

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