New Delhi [India], May 3 (ANI): Economic conditions in India’s manufacturing sector remained favourable in April as companies scaled up production in line with a further improvement in demand, according to the latest IHS Markit Manufacturing PMI released on Monday.
While output and sales increased at the slowest rates since last August due to an intensification of the Covid-19 crisis, there was a faster upturn in international orders.
Moreover, quantities of purchases expanded at one of the strongest rates seen for over nine years as firms sought to boost their inventories.
Survey participants also signalled a steep increase in input costs, the quickest since July 2014 and upward revisions to selling prices. The rate of charge inflation climbed to the highest in seven-and-a-half years.
The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) was at 55.5 in April, little-changed from March’s reading of 55.4 and indicating a solid improvement in health of the sector.
Consumer goods was the strongest-performing category followed by capital goods and then intermediate goods.
Both new orders and output at Indian manufacturers expanded at marked rates that were nevertheless the slowest in eight months.
Growth was attributed to a pick-up in demand and marketing efforts though hampered by the Covid-19 pandemic.
New export orders increased for the eighth consecutive month in April and at the fastest rate since October 2020. The rise was associated with a pick-up in international demand for Indian goods with all three monitored sub-sectors registering expansion.
Sustained growth of new work and greater output requirements boosted input buying during April. Purchasing activity expanded at one of the strongest rates recorded over the past nine years.
Subsequently, stocks of purchases continued to increase. The accumulation was the eighth in successive months and sharp.
“However, the headwinds facing manufacturers cannot be ignored,” said Pollyanna De Lima, Economics Associate Director at IHS Markit.
“Data for the coming months will be important at verifying whether client demand is resilient to these challenges or if producers will have to further absorb cost burdens themselves to secure new work.”
The IHS Markit India Manufacturing PMI is compiled from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers. The panel is stratified by detailed sector and company workforce size based on contributions to GDP.
IHS Markit is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government. (ANI)