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Indian manufacturing activity eases in month of March

05 Apr 2021 Evaluate

Indian manufacturing activity eased in the month of March but it remains above the boom-or-bust line of 50 that separates expansion from contraction, as firms scaled up production and input buying in line with another upturn in sales. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - stood at 55.4 in March as against 57.5 in February.

Besides, goods producers indicated that strengthening demand and the receipt of orders in bulk underpinned a further rise in overall sales. Similarly, factory production expanded at a sharp, albeit slower, pace. Those companies that signalled growth mentioned higher new work intakes. The upturn was reportedly restricted by the COVID-19 pandemic. New export orders increased further in March, stretching the current sequence of growth to seven months.

On the price front, the rate of input cost inflation was among the strongest seen over the past three years. However, selling prices increased only moderately as companies limited their adjustments to retain a competitive edge and boost sales. Further, business confidence waned in March. While some firms foresee output growth in the coming 12 months, the vast majority predicted no change from present levels.

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