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Indian manufacturing activity growth slows to 51.8 in March

03 Apr 2020 Evaluate
Amid softer rises in both output and new business, Indian manufacturing activity growth weakened in the month of March 2020, as international demand faltered owing to the coronavirus pandemic. 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 March from 54.5 in February. Nevertheless, despite a slowdown, the manufacturing sector activity expanded as the PMI reading stood above the watershed 50 mark, which differentiates growth from contraction.

The report found that manufacturing firms continued to increase their staff numbers in March, but the pace of hiring remained subdued. The rate of workforce expansion was unchanged from February's recent low. Besides, signs of supply-side disruption crept into the Indian manufacturing sector in March, with vendor performance deteriorating for the first time since last October.

On the price front, cost burdens continued to rise, extending the current sequence of inflation to five months. That said, the latest increase was the slowest in that run and only marginal overall. In line with the rise in input costs, firms opted to increase their average output charges in March. Meanwhile, sentiment towards the 12-month business outlook eased in March. Firms remained confident of a rise in output overall, but positivity hit its joint-weakest level since the series' inception in April 2012 (alongside April 2015).

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