According to the report of S&P Global, inflation is at a high level of 5 months. Which has caused concern. If inflation rises further, demand may weaken.
Manufacturing PMI in India: Manufacturing activity in the country has declined. The S&P Global India Manufacturing Purchasing Managers’ Index (PMI) declined to 54.0 in March from 54.9 in February. PMI figures are above 50 in March also, that is, there has been an expansion in the manufacturing sector. But this growth has been less as compared to February. According to the report of S&P Global, inflation is at a high level of 5 months. Which has caused concern. If inflation rises further, demand may weaken. Due to which the manufacturing sector will be affected.
Let us tell you that if the Manufacturing Purchasing Managers Index (PMI) remains above 50, it means that there is expansion in activities. Whereas if it is below 50, it is a sign of weakness.
Export orders weaken in March
S&P Global says that goods producers indicated that new orders continued to rise in March. But the rate of increase came down to a low of 6 months. On the external front, new export orders received by Indian manufacturers weakened in March, putting a brake on eight consecutive months of growth in these orders. New export orders fell for the first time in nine months, although employment in the manufacturing sector has not deteriorated. The current level of employment was sufficient to meet the requirements.
Another hike in input cast
S&P Global’s economics associate director Poliana de Lima says that the growth of the manufacturing sector in India weakened at the end of fiscal year 2021/22. Companies reported slowdown in new orders and production. The manufacturer recorded another increase in input cost at the end of FY 2021/22. The cost of chemicals, energy, clothing, food items and metals were reportedly higher as compared to February. Goods producers have indicated paying higher prices for chemicals, energy, clothing, food items and metals.
worry about inflation
According to this report by S&P Global, the concern is about the increase in prices. Inflation is at a 5-month high and the burden of rising production costs seems to be passing on to the customers. Right now the demand is strong enough to bear this inflation. But if inflation continues to rise at the same rate, we may see further pressure on demand.
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