New Delhi, Mar 1 (KNN) India’s factory activity expanded for a second straight month in February, however, output price inflation also accelerated in February as businesses looked to protect margins in the face of rising cost burdens, highlighted a Survey.

The Nikkei Manufacturing Purchasing Managers' Index, compiled by IHS Markit, rose to 50.7 in February from 50.4 in January. That beat a Reuters poll median of 50.3 and was the highest level since November.

Readings above 50.0 signal an expansion in activity.

"Indian manufacturers benefited from recovering demand and raised production volumes. However, with growth rates well below-par, the sector still has many areas to develop before it can fire on all cylinders," said Pollyanna De Lima, an economist at survey compiler IHS Markit.

"Businesses don't yet seem convinced as to the sustainability of the rebound."

The Survey said manufacturing employment declined, though the rate of job losses was marginal overall.

Input price inflation quickened in February, with the rate of increase accelerating to the fastest in two and-a-half years. Indian goods producers reported higher purchasing costs for metals, chemicals, energy and plastics.

Output price inflation also accelerated in February as businesses looked to protect margins in the face of rising cost burdens. The rate of charge inflation was solid and the strongest since October 2013.

Confidence among Indian manufacturers was relatively subdued in February. Although sentiment towards the year-ahead outlook for output remained positive, the degree of optimism fell since January and was well below its near five-year historical average, said the report.