Indian manufacturing activity improved slightly in the month of April, as companies scaled up production in line with a further improvement in demand. While output and sales increased at the slowest rates since last August due to an intensification of the COVID-19 crisis, there was a faster upturn in international orders. Moreover, quantities of purchases expanded at one of the strongest rates seen for over nine years as firms sought to boost their inventories.
As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - stood at 55.5 in April as against 55.4 in March. Consumer goods was the strongest-performing category, followed by capital goods and then intermediate goods. Manufacturing employment continued to fall, but the rate of contraction recorded in April was marginal and the weakest in the current 13-month sequence of job shedding.
On the price front, in April, there was the steepest rise in input prices since mid-2014. As a result, factory gate charges increased further. The rate of inflation was sharp and the fastest seen for seven-and-a-half years. Meanwhile, there was another decline is stocks of finished goods as companies reportedly utilised existing inventories to meet sales requirements. Some firms also linked the fall in post-production stocks to a lack of raw material availability.