PMI for April rose to 55.4
According to the data released by IHS Markit, purchasing managers’ index (PMI) in April increased marginally to 55.5. During March’ 2021, it fell to 55.4, a seven month low. The rise in index in April has been mainly due to export growth as the domestic demand continued to be low due to second wave. Growth in new export orders has been highest since October while new domestic factory orders and output touched their lowest level of the past eight months.
Discussing the continuous growth in export orders, IHS Markit commented, “The rise was associated with a pick-up in international demand for Indian goods, with all three monitored sub-sectors registering expansion.” According to Pollyanna De Lima, economics associate director at IHS Markit, in April declining employment level eased while business confidence strengthened for the one-year outlook.
However, she further added, “The headwinds facing manufacturers cannot be ignored. The surge in covid cases could dampen demand further when firms’ financials are already susceptible to the hurdle of rising global prices. April saw the steepest increase in input costs for nearly seven years drive the sharpest upturn in output charges since October 2013. Data for the coming months will be important for verifying whether client demand is resilient to these challenges or if producers will have to further absorb cost burdens themselves to secure new work.” Stock of finished goods fell in April as companies used the existing inventories to meet sales requirements.