S&P India Manufacturing PMI falls to 54 in March; slowest output growth since September 2021

The S&P Global India Manufacturing Purchasing Managers’ Index (PMI) fell from 54.9 in February to 54 in March, with both manufacturing and sales growing at their slowest pace in six months and inflation issues pushing business confidence to its lowest level in two valleys. year.

A reading of 50 on the PMI indicates no change in business activity levels. New export orders received by Indian goods makers declined modestly in March, ending an eight-month growth streak.

“The slowdown has been accompanied by intensification of inflationary pressures, although the pace of input cost growth has remained slower than it was towards the end of 2021,” said Pollyanna De Lima, associate director of economics at S&P Global. In particular, prices for chemicals, energy, fabrics, foodstuffs and metals were higher than in February and the general inflation rate facing producers accelerated.

“Output prices rose in March as commodity makers wanted to share some of the additional input costs with customers, pushing cost inflation to a five-month high,” said S&P Global.

“For now, demand is strong enough to withstand price increases, but if inflation continues to rise, we could see a greater slowdown, if not an outright contraction, in sales,” said Ms. De Lima, associate director of economics at S&P Global. , noting that the latest PMI points to a weakening of manufacturing growth in India in the final month of the fiscal year.

After three straight months of job cuts, the manufacturing sector saw “broad stabilization in the workforce,” but companies indicated wage numbers were sufficient to meet current requirements, dampening the prospects for new jobs.

Anecdotal evidence suggests that inflation concerns and economic uncertainty have dampened general confidence, the company said in a note on the Index, which is based on responses from 400 manufacturers and then adjusted for seasonal fluctuations.

Additional input purchases in March grew at the weakest pace since August 2021, but were still ‘marked’. Still, pre-production inventories rose for the ninth straight month, with a sharper and faster increase than in February. On the other hand, restrictions on suppliers appeared to ease as delivery times extended by the shortest duration in nearly a year, S&P Global said.

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