Manufacturing PMI for India has declined from 57.5 in February to 55.4 in March, a seven-month low. Growth has lost some of its momenta, with the latest reading which pointed to a substantial improvement in the health of the sector which outpaced the long-run series average.

Prepared and released by IHS Markit, the PMI data is published monthly in advance of comparable official economic data. Considered to be one of the essential high-frequency economic indicators. In the GDP, the manufacturing sector has a share of almost 15% and is one of the major sources of employment. A Manufacturing PMI is compiled from responses to questionnaires, which are sent to purchasing managers in a panel of about 400 manufacturers. A diffusion index is then calculated for each survey variable, the index is the sum of the percentage of higher responses and half the percentage of unchanged responses. These indices vary from 0 to 100. A value above 50 indicates an overall increase compared to the previous month and below 50 an overall decrease. The headline PMI is a weighted average of the five indices comprising 30% New Orders, 25% Output, 20% Employment, 15% Suppliers’ Delivery Times, and 10% Stocks of Purchases. Survey participants indicated about the demand growth being constrained by the development of the Covid-19 pandemic, while the rise in input buying was curtailed by an intensification of cost pressures. with the predictions about the vaccination program curbing the disease and underpinning output growth in the year ahead indicated that the business confidence remained positive, growing uncertainty over the near-term possibility due to the rise in Covid-19 cases, the sentiment has been dragged to a seven-month low. The Indian manufacturers are looking determined to experience a challenging month in April, as the Covid-19 restrictions are expanding and lockdown measures are being re-introduced in many states.

Addressing the employment issues, the report accompanying the index stated that it declined in March, following the current sequence of job shedding to a year. The panelists indicated that the decline originated from the Covid-19 restrictions related to workforces. Notwithstanding the decrease in workers numbers, outstanding business rose only marginally. It was also found that the business confidence subsided in March. While some firms foresee output growth in the coming 12 months, the vast majority have predicted no change from present levels.