According to a recurrent review issued on Monday, India’s manufacturing sector lost further growth momentum in March, falling to a seven-month low as the COVID-19 pandemic constrained to demand.
The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) fell from 57.5 in February to 55.4 in March, a seven-month low. However, the most recent reading indicated a significant improvement in the sector’s health that outpaced the long-run series average, according to the study.
A score above 50 symbolises development, while a score below 50 indicates contraction. “Production, new orders, and input buying grew at a slower pace,” Pollyanna De Lima, the Economics Associate Director at IHS Markit, said.
Lima went on to claim that “survey participants suggested that the worsening of the COVID-19 pandemic limited demand growth, while an intensification of cost pressures curtailed the increase in input buying.”
“With COVID-19 restrictions extended and lockdown measures reintroduced in several states, Indian manufacturers appear to be in for a difficult month in April,” Lima predicted.
According to data updated on Monday by the Union Health Ministry, India reported an all-time high of 1,03,558 coronavirus infections in a single day, taking the total number of COVID-19 infections in the country to 1,25,89,067.
According to the report, jobs plummeted in March, bringing the current work loss to a year. “Panelists expressed that COVID-19 workforce limitations caused the decline. Despite the decrease in payroll, the outstanding company increased just marginally,” Lima said.
In March, business morale dropped. While some companies anticipate increased production in the coming year, the vast majority expect no improvement from current levels.
In terms of prices, the rate of input cost inflation was among the highest seen in the last three years. However, selling prices grew only marginally as firms restricted their changes in order to maintain a competitive advantage and raise profits.
According to experts, a sudden jump in COVID-19 cases, as well as the government’s recent mandate to the central bank to hold retail inflation around 4%, would likely prompt the Reserve Bank to maintain the status quo on policy rates at the following policy review, which will be announced on April 7.