Macroscope – PMI – Manufacturing PMI for the month March 2021

What is the latest Manufacturing PMI reading?

Manufacturing Sector in India continued to improve sharply in March despite some loss of momentum. Manufacturing PMI fell from 57.5 in February to a seven-month low of 55.4 in March.

A reading above 50 denotes expansion and below 50 denotes contraction

The latest reading was indicative of a substantial improvement in health of the sector that outpaced the long run series average. Firms scaled up production and input buying in line with another upturn in sales, but unemployment increased due to Covid-19 led restrictions.

Producers of goods indicated strengthening demand and receipt of order in bulk supported a strong increase in further sales. Average cost still remains a burden and continued to increase sharply in March. The rate of inflation was the second strongest in just under three-years.

Prices for chemicals, rubber and textiles remained higher during the month. And manufacturers are seemed to transfer this through hiked prices to end consumers in order to protect their margins, given ongoing increase in input costs.

Taking into consideration the vaccination programme to curb virus infections and underpin output growth in the year ahead meant that business confidence remained positive, while the growing uncertainty over near-term outlook due to rise in Covid cases dragged sentiments to a seven-month low.

With the restrictions expanding and lockdown on state government level being imposed the outlook for manufacturing sector for the month of April looks challenging.

Click here If you want to read the complete Manufacturing PMI HIS Markit press release