New Delhi, May 2: On the back of accelerated expansions in new orders and production, India’s Manufacturing Purchasing Managers’ Index (PMI) rose to 54.7 in April from 54 in March reflecting a solid and faster improvement in operating conditions across the sector, according to a private survey released on Monday. A PMI reading above 50 indicates expansion of the manufacturing sector compared to the previous month while a figure below 50 denotes contraction. The S&P Global survey said that Indian manufacturing industry enjoyed a strong start to fiscal year 2022-23 posting marked and accelerated expansions in new orders and production. “International sales grew solidly, following a contraction in March.
Inflationary pressures meanwhile intensified, owing to rising commodity prices, the Russia-Ukraine war and greater transportation costs. Input prices increased at the fastest pace in five months, while output charge inflation hit a 12-month high,” the survey said. Echoing the trend seen for new business, the rate of output growth quickened in April and outpaced its long-run average. “April data showed a rebound in new export orders, following the first contraction for nine months in March. The rate of increase was solid and the strongest since last July,” noted the survey.
Firms signalled a further upturn in input costs during April. With chemical, electronic component, energy, metal, plastic and textile costs reportedly higher than in March. Increases were partly attributed to rising transportation fees and the war in Ukraine. The overall rate of inflation strengthened to a five-month high and outpaced its long-run trend. With capacity pressures among Indian manufacturers remaining negligible. Shown by a marginal rise in backlogs, there was only a mild increase in employment during April.
“Indeed, the vast majority of survey participants reported unchanged workforces from March’s levels,” the survey said. Pollyanna De Lima, Economics Associate Director at S&P Global said that Indian manufacturing PMI remained well inside positive territory during April recovering some of the ground lost in March. “Factories continued to scale up production at an above-trend pace. With the ongoing increases in sales. And input purchasing suggesting that growth will be sustained in the near-term”. Said De Lima.