Factory growth declines in April

Mumbai: The activity in India’s manufacturing sector slowed down in April, as new orders largely remained unchanged during the month, a private survey showed.

This is the slowest pace of growth in domestic manufacturing activity in last four months. The Nikkei India Manufacturing Purchasing Managers Index (PMI) fell to 50.5 in April from an eight month high of 52.4 recorded in March. A reading above 50 indicates expansion while a reading below 50 suggests contraction in manufacturing growth.

“PMI data indicated that manufacturers raised output at a slower pace in April as new business inflows were unchanged during the month. The upturn in new export orders was sustained, although growth was at a six-month low,” the survey said.

The survey highlighted the divergence with regards to stock levels with holding of finished goods continuing to fall while pre-production inventories rose again. Inspite of the stagnation in new work, the survey also revealed that the production of goods increased in April.  

“PMI data for India show a marked slowdown in output expansion during April, as growth of new work ground to a halt following a robust increase in the prior month. Looking into the sub-sector data, consumer goods producers fared better than their intermediate and investment goods counterparts where both output and new orders declined,” said Pollyanna De Lima, economist at Markit.

According to it, the input cost inflation accelerated at its fastest pace since May 2015 during the last month. The respondents said that a range of raw materials such as metals, chemicals, plastics, paper and food witnessed an increase in price.