India's Manufacturing PMI declines to 54 in March

The seasonally adjusted S&P Global India Manufacturing Purchasing Managers' Index (PMI) stood at 54 in March, falling from 54.9 in February.

The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease.

"Business conditions in India improved in March, but the latest results showed slower expansions in factory orders and production as well as a renewed decline in new export orders. At the same time, price indices increased since February to signal mounting price pressures. Inflation concerns meanwhile dampened business confidence, which fell to its lowest level in two years," said S&P Global on 4 April.

Goods producers indicated that new orders continued to increase in March. The rate of expansion eased to a six-month low, but remained marked, the release stated.

Pollyanna De Lima, Economics Associate Director at S&P Global, said: Manufacturing sector growth in India weakened at the end of fiscal year 2021/22, with companies reporting softer expansions in new orders and production.

"The slowdown was accompanied by an intensification of inflationary pressures, although the rate of increase in input costs remained below those seen towards the end of 2021.

"Goods producers signalled higher prices paid for chemicals, energy, fabric, foodstuff and metals, despite supplier performance worsening to the least extent in almost a year.

"Once again, we saw the transfer of rising cost burdens to clients, with charge inflation at a five-month high. "For now, demand has been sufficiently strong to withstand price hikes, but should inflation continue to gather pace we may see a more significant slowdown, if not an outright contraction in sales.

"Companies themselves appeared very concerned about price pressures, which was a key factor dragging down business confidence to a two-year low."

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