A worker grinds a metal gate inside a household furniture manufacturing factory in Ahmedabad, India. File photo/Reuters
Expansion in India’s manufacturing sector hit its slowest in 15 months in August as demand and output grew at their weakest pace in a year and cost pressures increased, a private sector survey showed on Monday.
The survey comes after official figures showed India’s economy grew at an annual rate of 5.0% last quarter, its slowest in more than six years and significantly weaker than 5.7% in a Reuters poll.
The Nikkei Manufacturing Purchasing Managers’ Index , compiled by IHS Markit, declined to 51.4 in August from July’s 52.5, its weakest since May 2018. However, it has remained above the 50-mark separating growth from contraction for more than two years.
“August saw an undesirable combination of slowing economic growth and greater cost inflationary pressures in the Indian manufacturing industry,” Pollyanna De Lima, principal economist at IHS Markit, said in a release.
A sub-index tracking overall demand hit its weakest in more than a year and foreign orders increased at their slowest pace in 16 months.
Input costs rose at their quickest pace in nine months while the rate of increase in output prices was slower than in July, suggesting firms’ profit margins were squeezed.
With inflation predicted to remain below the Reserve Bank of India’s medium-term target of 4% for the rest of this year, the central bank is expected to ease further in October to boost a slowing economy.
“Another worrying sign was the first drop in input buying for 15 months, which reflected a mixture of intentional reductions in stocks and shortages of available finance,” De Lima said.
“Until manufacturers are willing to loosen the purse strings, it’s difficult to foresee a meaningful rebound in production growth on the horizon.”
Adding to the gloomy picture, tighter margins and demand growth easing meant firms barely increased headcount.
However, firms remained upbeat about the coming 12 months. Expectations of future output rose to their highest level in more a year, the survey showed.
Coronavirus cases are still rising in India, though slowly. The rigorous lockdown imposed at the end of March appears to have slowed down its spread.
India’s economy grew at its slowest pace in at least two decades last quarter, government data showed Friday, with warnings of far worse to come as it grapples with the fallout of the world’s largest coronavirus lockdown.
Production growth of India’s manufacturing sector eased in March amid export decline, PMI survey report showed. Accordingly, the headline seasonally adjusted IHS Markit India Manufacturing PMI grew at the slowest rate for four months in March,
MUMBAI: India’s cricket selectors on Sunday named Rishabh Pant as their preferred wicketkeeper for all three formats for next month’s tour of West Indies with the future of long-serving glovesman Mahendra Singh Dhoni still shrouded in mystery. Dhoni, 38, has been the subject of intense speculation on his
The US economy grew at a record pace in the third quarter as the government injected more than $3 trillion worth of pandemic relief which fueled consumer spending, but the deep scars from the COVID-19 recession could take a year or more to heal.
Aircraft manufacturers are hit by the devastating impact of the coronavirus pandemic on the aviation industry. The number of global commercial aircraft orders was zero during the month of September.
Peugeot manufacturer PSA Group returned to revenue growth in its core autos division in the third quarter, recovering from a slump during coronavirus lockdowns, though the prospect of new restrictions hit French shares.
The Bank of Japan (BOJ) trimmed its economic growth and inflation forecasts for the current fiscal year (2020-21) on Thursday but offered a more upbeat view on the recovery outlook, signalling that it has delivered enough stimulus for the time being.