A gauge of activity across India’s manufacturing sector fell to a seven-month low but remained above long run averages and continued to suggest expansion in activity.
The IHS Markit India Manufacturing Purchasing Managers’ Index stood at 55.4 in March 2021 compared with 57.5 in February, according to a media statement. A reading above 50 indicates economic expansion.
Firms scaled up production and input-buying in line with another upturn in sales. Production, new orders and input-buying saw sharp increases and outpaced their respective long-run averages but at softer rates, Pollyanna De Lima, economics associate director at IHS Markit, was quoted as saying in the statement.
Goods producers indicated that strengthening demand and receipt of orders in bulk underpinned a further rise in overall sales. Factory production also expanded but at a slower pace. Those companies that signalled growth mentioned higher new work intakes though the upturn was reportedly restricted by the pandemic.
New export orders accelerated in March.
While the rate of input cost inflation was among the strongest seen over the past three years, selling prices increased only moderately as companies limited their adjustments to retain a competitive edge and boost sales.
Employment continued to decline in March, taking the current sequence of job shedding to a year, the statement said. Covid-19 restrictions related to workforces likely contributed to the decline.
Business confidence waned in March. While some firms foresee output growth in the coming 12 months, the vast majority predicted no change from present levels. Where optimism was signalled, this was commonly pinned on hopes that Covid-19 controls would ease.