India’s Manufacturing PMI Drops On Weak Growth In Business Conditions
India’s manufacturing sector activity in April was the lowest in eight months, hurt by the weakest improvement in business conditions since August last year.
The Nikkei India Manufacturing Purchasing Managers’ Index declined 80 basis points to 51.8. New business growth moderated at the start of fiscal year 2018-19, reportedly curbed by the elections and a challenging economic environment, IHS Markit said in its report.
This was the 21st consecutive month that the manufacturing PMI remained above the 50-point mark. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.
“Although remaining inside expansion territory, growth continued to soften and the fact that employment increased at the weakest pace for over a year suggests that producers are hardly gearing up for a rebound,” Pollyanna De Lima, principal economist at IHS Markit, said in a monthly report.
International trade, however, contributed to the rise in total sales, with new export orders expanding at a solid rate that was marginally quicker than in March, the report said.
- Exports expanded solidly and at a slightly quicker pace than in March.
- Overall slowdown accompanied by cooling rates of inflation.
- Capital goods was the key source of weakness, recording contractions in new business and output.
- Growth sustained at both consumer and intermediate goods makers.
- Majority of companies withheld hiring in April.
With price pressures in the manufacturing economy cooling and growth losing momentum, it’s increasingly likely that the Reserve Bank of India may cut its official rate for a third successive time in June.Pollyanna De Lima, Principal Economist, IHS Markit