India’s manufacturing sector activity fell to four-month low in April on the back of stagnating orders, a survey pointed out.
The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) — a composite indicator of manufacturing sector performance — fell from 52.4 in March to 50.5 in April.
Pollyanna De Lima, Economist at Markit and author of the report, said: “PMI data for India show a marked slowdown in output expansion during April, as growth of new work ground to a halt following a robust increase in the prior month.”
Looking into the sub-sector data, consumer goods producers fared better than their intermediate and investment goods counterparts where both output and new orders declined, De Lima said.
A reading above 50 represents expansion while one below this level means contraction.
“The upturn in new export orders was sustained, although growth was at a six-month low. There were divergences with regards to stock levels, with holdings of finished goods continuing to fall while pre-production inventories rose again. On the price front, input costs increased at the fastest rate in 11 months, whereas charge inflation eased since March,” the survey said.
In spite of the stagnation in new work, goods production increased in April. However, the rate of expansion was only slight and softened since March. Meanwhile, buying levels rose for the fourth successive month, which in turn resulted in a further accumulation in stocks of raw materials and semi-finished products, it added.
With respect to employment, April saw manufacturing employment in India remain broadly unchanged. This trend has been evident for almost two years.
“Where backlogs of work increased, survey members blamed delayed payment from clients as well as shortages of some raw materials for this. Nevertheless, the rate of accumulation was only slight and in line with the long-run series average,” it said.