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NEW DELHI: Activity in the country’s manufacturing sector witnessed an unprecedented contraction in April amid national closure restrictions, after which new business orders collapsed at a record pace and companies dramatically reduced their number of employees, a monthly survey said Monday.
The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) fell to 27.4 in April, from 51.8 in March, reflecting the biggest deterioration in business conditions across the sector since data collection began more than 15 years.
The index fell into contraction mode, after remaining in the growth territory for 32 consecutive months.
In the PMI language, a print above 50 means expansion, while a score below that indicates contraction.
Amid the general business shutdown, demand conditions were severely hampered in April. New orders fell for the first time in two and a half years and at the highest rate in the survey’s history, far exceeding what was seen during the global financial crisis, according to the survey.
“After going through relatively unscathed March, the Indian manufacturing sector felt the full force of the coronavirus pandemic in April,” said Eliot Kerr, economist at IHS Markit.
Panelists attributed lower production to temporary factory closings that were triggered by restrictive measures to limit the spread of COVID-19.
Export orders also witnessed a sharp decline. Following the first reduction since October 2017 during March, overseas sales fell at a faster rate in April. “In fact, the rate of decline accelerated to the fastest since the series began more than 15 years ago,” the survey said.
On the labor front, deteriorating demand conditions caused manufacturers to drastically cut the number of employees in April. The decline in employment was the fastest in the history of the survey.
“In the last period of the survey, record contractions in production, new orders and employment signaled a serious deterioration in demand conditions.
“In the meantime, there was evidence of an unprecedented interruption on the supply side, with input delivery times greatly lengthened since data collection began in March 2005,” Kerr said.
On the price front, both entry costs and exit prices fell markedly as suppliers and manufacturers offered discounts in an attempt to secure orders.
Going forward, sentiment regarding the 12-month production outlook increased from the recent March low in the hope that demand will rebound once the COVID-19 threat has subsided and blockade restrictions have been lifted. relieved.
“There was an indication of positivity when looking at the companies’ 12-month outlook, with sentiment toward future activity rebounding from the all-time low in March. That said, the degree of optimism remained well below the historical average,” he said. Kerr.
In India, the death toll from COVID-19 rose to 1,373 and the number of cases rose to 42,533 on Monday, according to the Health Ministry.
Meanwhile, the coronavirus-induced blockade has extended beyond May 4, for another two weeks in the country.
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The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) fell to 27.4 in April, from 51.8 in March, reflecting the biggest deterioration in business conditions across the sector since data collection began more than 15 years.
The index fell into contraction mode, after remaining in the growth territory for 32 consecutive months.
In the PMI language, a print above 50 means expansion, while a score below that indicates contraction.
Amid the general business shutdown, demand conditions were severely hampered in April. New orders fell for the first time in two and a half years and at the highest rate in the survey’s history, far exceeding what was seen during the global financial crisis, according to the survey.
“After going through relatively unscathed March, the Indian manufacturing sector felt the full force of the coronavirus pandemic in April,” said Eliot Kerr, economist at IHS Markit.
Panelists attributed lower production to temporary factory closings that were triggered by restrictive measures to limit the spread of COVID-19.
Export orders also witnessed a sharp decline. Following the first reduction since October 2017 during March, overseas sales fell at a faster rate in April. “In fact, the rate of decline accelerated to the fastest since the series began more than 15 years ago,” the survey said.
On the labor front, deteriorating demand conditions caused manufacturers to drastically cut the number of employees in April. The decline in employment was the fastest in the history of the survey.
“In the last period of the survey, record contractions in production, new orders and employment signaled a serious deterioration in demand conditions.
“In the meantime, there was evidence of an unprecedented interruption on the supply side, with input delivery times greatly lengthened since data collection began in March 2005,” Kerr said.
On the price front, both entry costs and exit prices fell markedly as suppliers and manufacturers offered discounts in an attempt to secure orders.
Going forward, sentiment regarding the 12-month production outlook increased from the recent March low in the hope that demand will rebound once the COVID-19 threat has subsided and blockade restrictions have been lifted. relieved.
“There was an indication of positivity when looking at the companies’ 12-month outlook, with sentiment toward future activity rebounding from the all-time low in March. That said, the degree of optimism remained well below the historical average,” he said. Kerr.
In India, the death toll from COVID-19 rose to 1,373 and the number of cases rose to 42,533 on Monday, according to the Health Ministry.
Meanwhile, the coronavirus-induced blockade has extended beyond May 4, for another two weeks in the country.
