Survey shows input cost pressures persist, down from 55.3 in July to 52.3
India’s manufacturing recovery picked up in August, with the survey-based Purchasing Managers’ Index (PMI) coming down to 52.3. From July 55.3. As demand showed ‘signs of weakness due to pandemic’ and input price pressure remained. New order growth moderated, driving expansion below the longer-term average.
With overall optimism weakening last month, there was a fresh pause on recruitment in a sector that resumed recruitment in July after leaving jobs for 15 months. A score below 50 on the IHS Markit Index indicates contraction. The PMI had dropped to 48.1 in June, as the second COVID-19 wave took its toll.
Pollyanna de Lima, economics associate director at IHS Markit, said the Indian manufacturing sector extended its recovery in August, but growth lost momentum as demand weakened.
“Nevertheless, factory orders and output increased across the consumer, intermediate and investment goods categories,” she said. “The 12-month outlook for production remained positive, although confidence faded amid concerns about lack of pricing power due to the lasting scars of the pandemic and the adverse impact of rising costs on companies’ finances,” she explained.
Manufacturers’ cost burden has been rising for 13 consecutive months now, and was linked to shortages of raw materials and transportation problems by producers.
“August data pointed to back-to-back growth in new export orders, but growth lost momentum here as well. The pace of expansion was only modest,” said the economics research firm
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