India manufacturing PMI hits 7-month low in March

April 7, 2021 3:50 pm

Demand growth was forced by surge in fresh COVID infections, while the rise in input buying was curtailed by an intensification of cost pressures.

Data released by analytics firm IHS Markit recently, showed purchasing managers’ index (PMI) for the manufacturing sector fell to 55.4 in March from 57.5 in February as production, new orders and input-buying expanded at a slower pace.

Manufacturing activity fell to a seven-month low in March because of cost pressures even as a surge in covid-19 infections poses new challenges for businesses. IHS Markit said anecdotal evidence suggested that the upturn was blocked by elevated cost pressures. “On the price front, the rate of input cost inflation was among the strongest seen in the past three years. However, selling prices increased only moderately as companies limited their adjustments to retain a competitive edge and boost sales,” it added.

Pollyanna De Lima, Economics Associate Director, IHS Markit, said survey participants indicated that demand growth was constrained by the escalation of the COVID Pandemic, while the rise in input buying was curtailed by an intensification of cost pressures. “While predictions that the vaccination programme will curb the disease and underpin output growth in the year ahead meant that business confidence remained positive, growing uncertainty over the near-term outlook due to a rise in COVID cases dragged sentiment to a seven-month low. With COVID curbs expanded and lockdowns re-introduced in many states, Indian manufacturers look set to experience a challenging month in April,” she added.