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3 April 2018
 |
| India's manufacturing sector(The Total Investment & Insurance Solutions) |
India's manufacturing sector activity fell to a five-month low in March,
as new business orders rose at a slower pace, and firms showed little appetite
for recruitment, says a monthly survey.
The Total Investment & Insurance Solutions
The Nikkei India Manufacturing Purchasing
Managers Index (PMI), fell from 52.1 in February to a five-month low of 51.0 in
March, indicating the slowest improvement in operating conditions recorded by
the survey since last October.
This is the eighth consecutive month that the
index remained above the 50-point-mark. In PMI parlance, a print above 50 means
expansion, while a score below that denotes contraction. The Total Investment & Insurance Solutions
"India's manufacturing sector continued to grow, albeit at the weakest
pace since October, reflecting weaker gains in new business and a decline in
employment for the first time in eight months," said Aashna Dodhia,
Economist at IHS Markit and author of the report. The Total Investment & Insurance Solutions
Dodhia noted that the impact of US tariffs on
steel and aluminium on India is expected to be limited, as India's exports in
both metals to the US accounted for less than 0.4 percent of total merchandise
exports.
Though new export orders rose during March,
Dodhia said, "On a negative note, further advances in trade disputes could
potentially weigh on sales to international clients". The Total Investment & Insurance Solutions
On the employment front, firms reduced their
payroll numbers for the first time in eight months, albeit at a fractional
pace.
"PMI employment data gave warning signs
in the labour market," Dodhia said, adding that "manufacturers
operating in consumption and intermediate market groups signalled no appetite
for recruitment".
Meanwhile, business sentiment remained weak,
reflecting some concerns regarding business prospects over the next 12 months.
"Indeed, amid a slower expected pace of
recovery in consumer spending, IHS Markit marginally downgraded its real GDP
forecast to 7.3 percent for fiscal year 2017-2018," Dodhia said. The Total Investment & Insurance Solutions
On the prices front, the survey noted that
the recent "build-up of inflationary pressures eased in March, with softer
increases in both input costs and output prices recorded".The Total Investment & Insurance
Solutions
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