Manufacturing growth slows down: PMI report

The composite indicator of manufacturing performance increased to 51 in March 2018 from 52.1 reported for February. An index reading of above 50 indicates an overall increase in economic activity and below 50 an overall decrease. 

According to the key macro-economic data point, Indian goods manufacturers raised “their output for the eighth successive month during March” and that higher production was mainly linked to new order growth and favourable demand conditions. 

As per the PMI report, amid “reports of spare operating capacity”, firms reduced their payroll numbers for the first time in eight months, “albeit at a fractional pace”. Commenting on the PMI data, Aashna Dodhia, Economist at IHS Markit and the author of the report, said: “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.” 

“New export orders rose during March, thereby marking a five-month period of growth. 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 per cent of total merchandise exports. On a negative note, further advances in trade disputes could potentially weigh on sales to international clients.”