India's manufacturing sector recorded the weakest performance in ten months this May, accelerating job losses as order books shrank, according to the IHS Markit Purchasing Managers' Index (PMI) which slid from 55.5 in April to 50.8 in May.

"The Indian manufacturing sector is showing increasing signs of strain as the COVID-19 crisis intensifies. Key gauges of current sales, production and input buying weakened noticeably in May and pointed to the slowest rates of increase in ten months. In fact, all indices were down from April," said Pollyanna De Lima, Economics Associate Director at IHS Markit.

 Lima, however, noted that the detrimental impacts of the pandemic and associated restrictions seen in the manufacturing sector are considerably less severe than during the first lockdown when unprecedented contractions had been recorded. "Growth projections were revised lower, as firms became more worried about the escalation of the pandemic and local restrictions. The overall degree of optimism towards the year-ahead outlook for output was at a ten-month low, a factor which could hamper business investment and cause further job losses," Lima said.

 The growth of the manufacturing sector was curbed by the escalation of the pandemic and difficulties in securing raw materials, the survey said. Concerns surrounding the pandemic restricted business confidence towards the year-ahead outlook for production, the survey said. "Amid a lack of new work, goods producers reduced headcounts again, with the rate of job shedding quickening in May," Lima said.

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