Manufacturing activity slowed to a six-month low of 52.6 in March due to lower levels of new orders and production, according to a private sector survey.
The Nikkei India Manufacturing Purchasing Managers’ Index came in at a lower reading in March from 54.3 in February. A reading over 50 implies expansion while one below that denotes a contraction in activity.
Improving conditions
“Registering 52.6 in March, the Nikkei India Manufacturing Purchasing Managers’ Index continued to signal improving operating conditions in the sector,” the report said. “However, falling from 54.3 in February to a six-month low, the latest figure highlighted a loss of growth momentum.”
“Softer increases were registered for new orders, production, input buying and employment,” the report added. The report said that the increase in new orders was the slowest in six months, with firms reporting that the effect of strong underlying demand, successful advertising, and the receipt of bulk orders was being curbed by competitive conditions and the upcoming elections.
That said, the report highlighted the fact that business sentiment strengthened to a seven-month high in March with companies predicting that marketing initiatives, capacity expansion plans and favourable public policies after the elections would support production growth over the course of the coming 12 months.
“Although global headwinds and a general slowdown in trade present some concerns for the future health of Indian manufacturers’ order books, so far companies have been able to weather the storm and secure healthy inflows of new work from abroad,” said Pollyanna De Lima, principal economist, IHS Markit and author of the report.
“A guarded attitude towards appointing new staff dragged job creation to an eight-month low, while buying activity growth moderated amid sufficient input stocks at some companies,” Ms. De Lima added.
