Indian manufacturing activity fell back into decline in the month of June, as the intensification of the pandemic and strict containment measures negatively impacted on demand. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - fell to 48.1 in June as against 50.8 in May.
The report further said that the stretch of new order growth that started in August 2020 came to an end in June, with firms linking the deterioration in demand to the pandemic. Despite being solid, the pace of contraction was much softer than those registered at the onset of COVID-19 last year.
Besides, COVID-19 restrictions also curtailed international demand for Indian goods. New export orders decreased for the first time in ten months, albeit modestly. Falling new orders, business closures and the COVID-19 crisis triggered a reduction in output among Indian manufacturers. The decline was moderate relative to those seen in the first half of 2020, but ended a ten-month sequence of growth.
On the price front, input costs increased further in June, with firms reporting higher prices for chemicals, electronic components, energy, metals and plastics. Additional cost burdens were again transferred on to clients, with goods producers hiking their fees for the tenth straight month.