NEW DELHI: Manufacturing activity accelerated at its slowest pace in seven months in March, thanks to the resurgence in Covid-19 cases that weighed on domestic demand and output. Loss of growth momentum, due to a surge in Covid-19 cases as well as high input cost pressure, decelerated pace of new orders and production for India's manufacturing sector in March, as per the IHS Markit India Manufacturing PMI report.

The report said that firms scaled up production and input buying in line with another upturn in sales, but employment decreased due to the pandemic curbs and a lack of pressure on capacity. On the price front, the rate of input cost inflation was among the strongest seen over the past three years, the report said. However, selling prices increased only moderately as companies limited their adjustments to retain a competitive edge and boost sales. Consequently, the headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) fell from 57.5 in February to a seven-month low of 55.4 in March.

The PMI ranges between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month. "However, the latest reading was indicative of a substantial improvement in the health of the sector that outpaced the long-run series average." According to the report, goods producers indicated that strengthening demand and the receipt of orders in bulk underpinned a further rise in overall sales.

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