A gauge of activity across India’s manufacturing sector remained steady despite mounting cases of Covid-19 amid the second wave.
The IHS Markit India Manufacturing Purchasing Managers’ Index stood at 55.5 in April compared with 55.4 in March 2021, according to a media statement. That’s the eight straight month of the index remaining in the expansion zone.
A reading above 50 indicates economic expansion.
Consumer goods was the strongest-performing category, followed by capital goods and intermediate goods, the statement said.
Growth was attributed to a pick-up in demand and marketing efforts, though hampered by the pandemic.
New export orders increased for the eighth consecutive month in April and at the fastest rate since October 2020, led by a rise in international demand.
Sustained growth of new work and greater output requirements boosted input buying during April. Purchasing activity expanded at one of the strongest rates recorded over the past nine years.
Goods producers noted the steepest rise in input prices since mid-2014. Anecdotal evidence highlighted higher chemical, energy, metal, plastic and transportation costs. As a result, factory-gate charges increased further. The rate of inflation was sharp and the fastest seen for seven-and-a-half years.
Employment continued to fall but the rate of contraction recorded in April was the weakest in the current 13-month sequence of job shedding, the statement said.
Outstanding business rose in April along with another decline in stocks of finished goods.
The headwinds facing manufacturers, however, cannot be ignored, cautioned Lima. “The surge in Covid-19 cases could dampen demand further when firms’ financials are already susceptible to the hurdle of rising global prices.”