Marginal increase in April mfg PMI

India's manufacturing activities remained favourable in April, as companies scaled up production in line with a further improvement in demand. While output and sales increased at the slowest rates since last August due to an intensification of the Covid-19 crisis, there was a faster upturn in international orders, a monthly private survey said on Monday.

Data released by analytics firm IHS Markit showed the Purchasing Managers' Index, or PMI, for April marginally rose to 55.5 after declining to a seven-month low in March at 55.4. A figure above 50 indicates expansion, while sub-50 signals contraction. The survey, however, said the new export orders increased for the eighth consecutive month in April. "The rise was associated with a pick-up in international demand for Indian goods, with all three monitored sub-sectors registering expansion," it said.

Commenting on the latest survey, Pollyanna De Lima, economics associate director at IHS Markit, said, "The PMI results for April showed a further slowdown in rates of growth for new orders and output, both of which eased to eight-month lows amid the intensification of the Covid-19 crisis. Still, the increases were strong by historical standards and the survey revealed other positive news. New export orders surged to the fastest since last October and buying levels expanded at one of the sharpest rates seen for nine years. Also, the downturn in employment eased and business confidence towards the one-year outlook strengthened."

"The headwinds facing manufacturers cannot be ignored, however. The surge in Covid-19 cases could dampen demand further when firms' financials are already susceptible to the hurdle of rising global prices. April saw the steepest increase in input costs for nearly seven years drive the sharpest upturn in output charges since October 2013. Data for the coming months will be important at verifying whether client demand is resilient, added De Lima.