“Output prices rose in March as goods manufacturers sought to share some of the additional input cost burden with customers, pushing fee inflation to a five-month high,” S&P Global said.
“Output prices rose in March as goods manufacturers sought to share some of the additional input cost burden with customers, pushing fee inflation to a five-month high,” S&P Global said.
The S&P Global India Manufacturing Purchasing Managers’ Index (PMI) fell to 54 in March from 54.9 in February, with both production and sales growing at the slowest pace in six months and inflation concerns pushing business confidence to its lowest reading for two months pressed years.
A reading of 50 on the PMI indicates no change in business activity levels. New export orders received from Indian goods makers fell slightly in March, ending an eight-month streak of growth.
“The deceleration has been accompanied by an intensification of inflationary pressures, although the rate of increase in input costs has remained below that seen towards the end of 2021,” said Pollyanna De Lima, associate director of economics at S&P Global. In particular, chemical, energy, cloth, food and metals prices were higher than in February and the headline inflation rate facing producers accelerated.
“Output prices rose in March as goods manufacturers sought to share some of the additional input cost burden with customers, pushing fee inflation to a five-month high,” S&P Global said.
“For now, demand has been strong enough to withstand price increases, but if inflation continues to pick up steam, we could see a more significant slowdown, if not an outright drop, in sales,” said Ms. De Lima, economics associate director at S&P Global , noting that the latest PMI points to weaker manufacturing growth in India in the final month of the fiscal year.
After three straight months of job cuts, manufacturing saw “a broad stabilization in workforce numbers”, but firms said there were enough employees to meet current demands, dampening prospects for new jobs.
Anecdotal evidence suggested inflation concerns and economic uncertainty were dampening overall confidence, the company said in a note to the index, which is based on responses from 400 manufacturers and then adjusted for seasonal variations.
Additional wholesale purchases in March grew at the weakest pace since August 2021 but were still “prominent”. Still, pre-production inventories rose for the ninth straight month, posting a stronger and faster increase than February. On the downside, restrictions on suppliers appeared to be easing as delivery times extended by the shortest extent in nearly a year, S&P Global said.
