India Manufacturing Downturn Slows In June

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India’s manufacturing conditions weakened in June with regional lockdown extensions, but the pace of contraction slowed further, survey results from IHS Markit showed on Wednesday.

The headline IHS Markit manufacturing Purchasing Managers’ Index, or PMI, increased to 47.2 in June from 30.8 in May. Any reading below 50 indicates contraction in the sector.

The manufacturing sector declined for the third consecutive month.

Output contracted sharply in June and sales fell for the third straight month, albeit at a slower pace since the introduction of lockdown measures in March.

New export orders fell for the fourth month in a row. Employment decreased in June, remaining among the quickest since the survey began in March 2005.

Firms reduced their purchasing activity for the fourth straight month and input buying declined at the slowest pace since March.

On the price front, input prices continued to fall in June and manufacturers continued to reduce output prices.

Firms remained positive for the 12-month business in June with the sentiment strengthening to a four-month high.

“The recent spike in new coronavirus cases and the resulting lockdown extensions have seen demand continue to weaken,” Eliot Kerr, an economist at IHS Markit, said.

“Should case numbers continue rising at their current pace, further lockdown extensions may be imposed, which would likely derail a recovery in economic conditions and prolong the woes of those most severely affected by this crisis,” the economist added.

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