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India’s manufacturing PMI slows again in April

02 May 2019 Evaluate

April data signaled further loss in the growth momentum across India's manufacturing sector, reflecting softer increase in new orders. Capital goods sector was the key source of weakness, recording contractions in new business and output. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - eased to 51.8 in April from 52.6 in March. However, the PMI reading stood above the watershed 50 mark, which differentiates growth from contraction.

The survey reports also noted that slower rise in new orders restricted growth of output, employment, input buying and business sentiment. New business growth moderated at the start of fiscal year 2019-20, curbed by the elections and a challenging economic environment. The increase in order book volumes was the weakest in eight months. Output expansion in April got impacted due to slowdown in growth of total sales, coupled with cashflow difficulties and competitive pressures.

Besides, the report found cooling rates of inflation, with input cost inflation easing to a 43-month low. Factories responded by lifting their own fees to a lesser extent. The rate of charge inflation was marginal and below its long-run average. Meanwhile, output expectations remained positive in April, with optimism supported by post-election growth predictions.

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