India’s manufacturing sector contracted for the first time in eleven months in June, due to the intensification of the pandemic and strict containment measures, survey results from IHS Markit showed on Thursday.
The headline IHS Markit manufacturing Purchasing Managers’ Index, or PMI, fell to 48.1 in June from 50.8 in May. The sector shrank for the first time since July last year. Any reading below 50 indicates contraction in the sector.
“The intensification of the Covid-19 crisis in India had a detrimental impact on the manufacturing economy,” Pollyanna De Lima, an economics associate director at IHS Markit, said.
New orders declined in June and new export orders fell for the first time in ten months. Output decreased in June ending a ten-month sequence of growth.
Buying levels declined at a pace that was among the fastest rates on record in June. Employment fell marginally and backlogs of work decreased for the second straight month.
Suppliers’ delivery time lengthened slightly in June. Input cost rose further in June and the rate of inflation was the joint-lowest in five months.
Output prices continued to rise but the rate was at a three-month low.Business confidence weakened slightly in June due to the uncertainty over the pandemic.