As was forecasted, India’s manufacturing activity slumped to a record low in April as business activities came to a near standstill after the Centre imposed a nationwide lockdown, on 25 March, to contain the spread of coronavirus pandemic.
The Nikkei manufacturing Purchasing Managers’ Index (PMI) for India declined to 27.4 in April from 51.8 in March, recording the sharpest deterioration in business conditions since data analytics firm IHS Markit began recording data 15 years ago. It is the first time in nearly three years that the manufacturing PMI has contracted.
A figure of above 50 indicates expansion, while a sub-50 print signals contraction. The survey by IHS Markit tracks new orders, output, jobs, suppliers’ delivery time, and stocks of purchases for around 400 manufacturers.
The decline in operating conditions was partially driven by an unprecedented contraction in output. New orders fell for the first time in two-and-a-half years and at the sharpest rate in the survey’s history, far outpacing that seen during the global financial crisis.
“In the latest survey period, record contractions in output, new orders and employment pointed to a severe deterioration in demand conditions. Meanwhile, there was evidence of unprecedented supply-side disruption, with input delivery times lengthening to the greatest extent since data collection began in March 2005,” an economist at IHS Markit said.