India’s manufacturing sector contracted at a faster rate in July, after showing some improvement in June, as regional lockdowns by state governments took their toll on market operations.
The IHS Markit India Manufacturing Purchasing Managers Index (PMI) fell to 46 in July from 47.2 in June. The reading pointed to a marked worsening in market conditions across the Indian manufacturing sector, to which firms reacted by slashing both staff numbers and purchasing activity.
Data from Indian factories shed more light on the state of the economy conditions in one of the countries most hit by the Covid-19 pandemic, Eliot Kerr, IHS Markit economist, said in the report. He said the findings of the survey showed a re-acceleration of the declines in main production indices and new orders, undermining the stabilization pattern seen in the last two months.
According to the IHS Markit, the subdued demand was indicated by a further pronounced decrease in the number of new orders placed with manufacturers last month and attributed to commonly mentioned long-term closures of customers’ companies.
More reduction of new export orders was seen as foreign customers became unable to position orders as the length of the pandemic was unclear. The new drop-in shipments have been the softest for four months.
Contrarily to the existing circumstances, producers were steadily confident regarding potential operations, the study stated. Sentiment to 12-month market forecast rose to a five-month peak for the second month in a row. However, the degree of positivity was still far below the historical average, it added.
