Factory activity in the country grew at its slowest pace in four months as the impact of the coronavirus pandemic weighed on sentiment, clouding the business confidence outlook.
The IHS Market India Manufacturing PMI in March was at 51.8, below the 54.5 mark recorded in February and the reading signalled the slowest improvement in business conditions since November 2019. The 50-point mark separates expansion from contraction. The survey is compiled from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.
“The Indian manufacturing sector remained relatively sheltered from the negative impact of the global coronavirus outbreak in March. However, there were pockets of disruption and a clear onset of fear among firms,” said Eliot Kerr, economist at IHS Markit.
“New orders and output both grew at softer rates, but those readings were relatively tame compared to those seen at goods producers in Europe and other parts of Asia. The most prominent signs of trouble came from the new export orders and future activity indices, which respectively indicated tumbling of global demand and softening of domestic confidence. Should the trajectory of injections continue in the same vein, the Indian manufacturing sector can expect a much sharper negative impact in the coming months, similar to the scale seen in other countries,” Kerr said.