New Delhi: The manufacturing sector activity in India picked up in April amid solid increase in demand as well as factory orders and renewed expansion in global sales, according to a private survey.
The Manufacturing Purchasing Managers' Index (PMI) compiled by S&P Global improved from 54.0 in March to 54.7 in April, as the pandemic-induced curbs have started to retreat, the PTI reported.
The PMI data in April showed an overall improvement in operating conditions for the 10th straight month.
The survey said, “Some firms foresee further improvements in demand and economic conditions, while others noted that the year-ahead outlook was difficult to predict.”
According to PMI parlance, points above 50 means expansion, while a score below 50 denotes contraction.
"The Indian manufacturing PMI remained well inside positive territory during April, recovering some of the ground lost in March. Factories continued to scale up production at an above-trend pace, with the ongoing increases in sales and input purchasing, suggesting that growth will be sustained in the near-term," said Pollyanna De Lima, Economics Associate Director at S&P Global.
The survey showed a rebound in new export orders in April, following the first contraction for nine months in March. The rate of increase was solid and the strongest since last July.
Meanwhile, inflationary pressures intensified amid rising commodity prices, Russia-Ukraine conflict, and greater transportation costs due to rising crude oil prices. Input prices picked up at the fastest pace in five months, while output charge inflation hit a 12-month high.
"A major insight from the latest results was an intensification of inflationary pressures, as energy price volatility, global shortages of inputs and the war in Ukraine pushed up purchasing costs. Companies responded to this by hiking their fees to the greatest extent in one year," Lima said, while adding that this escalation of price pressures could dampen demand as companies continue to share additional cost burdens with their clients.
The survey also showed that there was only a mild increase in employment during April.