India’s manufacturing activity expands, but demand slows: IHS Markit
A survey by analytics firm IHS Markit showed that manufacturing activity increased in August. The pace of growth remained muted due to the pandemic’s impact on demand.
A survey by analytics firm IHS Markit showed that manufacturing activity increased in August but, the pace of growth remained muted due to the pandemic’s impact on demand.
It showed that the purchasing managers’ index (PMI) for the manufacturing sector declined to 52.3 in August from 55.3 in July, separating expansion in activity from contraction.
While some companies reported growth backed by favourable market conditions and fruitful advertising, others reported a fall in sales due to the pandemic. There was an increase in new export orders, but the growth lost momentum. Indian manufacturers
also signalled a rise in cost burden.
In terms of employment, uncertainty regarding growth prospects, spare capacity, and efforts to keep a lid on expenses led to a hiring freeze in August.
Pollyanna De Lima, Economics Associate Director, IHS Markit, said the 12-month outlook for production remains positive. But the confidence has faded amid worries of the pandemic, the impact of rising costs on companies’ finances and a lack of pricing power.