PMI Reports Manufacturing Growth at Six Month Low

The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) make the following observations:

  • Amid slender increases in new orders and production, manufacturing activities slowed down to a six-month low in March, reflecting a loss of growth momentum.
  • The PMI slipped from 54.3 in February to 52.6 in March. The PMI score at 52.6 was a six-month low and it highlights a loss of growth momentum.
  • Even though the operating conditions in the Indian manufacturing industry are improving, there was has been a widespread slowdown in growth.
  • Factory orders and production expanded at the slowest pace since September last while job creation eased in March.
  • Softer increases were registered in new orders, production, input buying and employment. The deceleration was accompanied by subdued inflationary pressures, with rates of increase in input costs and output charges below their respective long-run averages.
  • Manufacturing sector expansion in India retreated in March, with metrics for factory orders, production, exports, input buying and employment all decreasing.

The report ahead of the RBI’s first monetary policy for the ongoing fiscal year to be announced on April 4 makes a strong case for the rate cut. The index is based on data collated from monthly replies to questionnaires sent to purchasing executives in over 400 industrial companies.

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