Conditions in India’s manufacturing sector continued to improve in March but lost some growth momentum in the month. India’s IHS Markit manufacturing PMI fell to a 7-month low of 55.4 compared to 57.5 in February amid an uncertain near-term outlook.
Manufacturers scaled production and raw material purchases driven by an uptick in sales. The sub-indices for output, new orders and input buying increased but at a slower pace, stated the Markit report. Producers expressed concerns about the surge of the COVID-19 pandemic and input purchases were pinned by higher costs. Input costs rose due to higher metal, chemical, rubber, plastic and textile prices.
Cost inflation rose to the highest level in the past three years, some producer hiked selling prices to pass on the cost increases, while other raised prices moderately to maintain their competitive edge and encourage sales.
Producers reported strong domestic demand, bulk orders and a higher number of new work orders but the uptick was limited by the pandemic. Export orders rose at a faster pace in March. Finished products inventories at producers dropped on increased orders.
With the re-imposition of COVID-19 restrictions in many states, manufacturers look forward to a challenging month ahead.