The manufacturing sector continued to strengthen in December, with the IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) remaining firm amid easing of Covid-19 curbs.
The seasonally adjusted IHS Markit Manufacturing PMI was at 56.4 in December, a tick higher than November’s reading of 56.3 and above the critical 50.0 threshold for the fifth straight month.
Manufacturers stepped up production and input buying amid efforts to rebuild their inventories following business closures earlier in the year, the IHS Markit survey said. While firms were able to lift input stocks, and did so at the quickest rate in nearly a decade, holdings of finished goods decreased sharply due to ongoing increases in new work.
In April 2020, the manufacturing PMI had plunged to a low of 27.4 as against 51.8 in March — its first contraction in 33 months. It has recovered since then.
Pollyanna De Lima, economics associate director at IHS Markit, said, “The latest PMI results for the Indian manufacturing sector continued to point to an economy on the mend, as a supportive demand environment and firms’ efforts to rebuild safety stocks underpinned another sharp rise in production. It’s important to emphasise the broad-based nature of the recovery, with marked expansions in both sales and output noted across each of the three monitored sub-sectors.”
“The latest figure was consistent with a marked improvement in business conditions across the sector,” the survey said. However, one area that failed to improve was employment, with jobs shed once again at the end of 2020. Meanwhile, raw material scarcity at suppliers caused delivery delays and the fastest rise in input costs for over two years, it added.
Reflecting the loosening of Covid-19 restrictions, strengthening demand and improved market conditions, factory orders increased during December, it said. “In response, firms lifted production again. In both cases, rates of expansion remained sharp despite easing to four-month lows,” IHS Markit said.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines