‘Manufacturing sector growth slows down in April’

The Nikkei India Manufacturing Purchasing Managers’ Index declined from 52.6 in March to 51.8 in April, reflecting weakest improvement in business conditions since August 2018.

india gdp, india gdp growth, india economic growth, industrial output of india, industrial growth progress, Manufacturing sector, Manufacturing growth, India manufacturing sector growth, business news, indian express

This is the 21th consecutive month that the manufacturing PMI remained above the 50-point mark. (Photo for representational purpose)

India’s manufacturing sector growth eased to an eight-month low in April as new business growth moderated, curbed by the elections and a challenging economic environment.

The Nikkei India Manufacturing Purchasing Managers’ Index declined from 52.6 in March to 51.8 in April, reflecting weakest improvement in business conditions since August 2018.

This is the 21th consecutive month that the manufacturing PMI remained above the 50-point mark. In PMI calculation, a print above 50 means expansion, while a score below that denotes contraction.

April PMI data indicated that softer increase in new orders restricted growth of output, employment and business sentiment “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,” said Pollyanna De Lima, Principal Economist at IHS Markit and author of the report.

When looking at reasons provided by surveyed companies for the slowdown, disruptions arising from the elections was a key theme, Lima said, adding that “firms also seem to have adopted a wait-and-see approach on their plans until public policies become clearer upon the formation of a government”.

While the general election, which began on April 11, is currently underway, votes will be counted on May 23.

On the prices front, input cost inflation eased to a 43-month low while the rate of charge inflation was marginal and below its long-run average. “With price pressures in the manufacturing economy cooling and growth losing momentum, it’s increasingly likely that the RBI may cut its official rate for a third successive time in June,” Lima said.

Story continues below this ad

Meanwhile, growth in China’s manufacturing sector eased in April, but remained in expansionary territory, an official reading showed on Tuesday. The China manufacturing purchasing managers’ index slipped to 50.1, according to the National Bureau of Statistics, remaining just above the 50-level separating expansion from contraction.

China’s manufacturing sector returned to growth in March following five consecutive months of contraction, showing the result of Beijing’s stimulus measures. The IHS Markit’s Manufacturing PMI in the US rose to 52.6 in its final release from 52.4 in March and came in above the market expectation of 52.4.