INDUSTRY

Manufacturing PMI in June slips to 11-month low as COVID curbs batter new orders

India’s domestic factory orders and production contracted to an 11-month low in June as measures to contain the Coronavirus put manufacturing into “reverse gear”. 


The IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) slipped to 48.1 in June from 50.8 in May and 55.5 in April. This was for the first time since July 2020 that the PMI dipped below the critical, no-change mark of 50. The fall came despite the fact that States eased restrictions during the period. 


The latest reading shows that manufacturing was in poor health, said the IHS report. The PMI averaged at 51.5 in the opening quarter of 2021-22, the lowest, three-month figure since the same period one year ago. 


The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month and below 50 an overall decrease. 


“The intensification of the COVID-19 crisis in India had a detrimental impact on the manufacturing economy. Growth of new orders, production, exports and input purchasing was interrupted in June as containment measures aimed at bringing the pandemic under control restrained demand. In all cases, however, rates of contraction were softer than during the first lockdown,” said Pollyanna De Lima, Economics Associate Director of IHS Markit. 


New order growth that started in August 2020 ended in June, with companies linking the deterioration in demand to the pandemic. The pace of contraction was much softer than that registered at the onset of COVID-19 last year. 

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