India's Manufacturing PMI Hits Four-Year Low Amid West Asia Conflict
Manufacturing PMI falls to 4-yr low in March as West Asia war hits demand
Business Standard
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India's manufacturing activity declined in March, with the HSBC India Manufacturing Purchasing Managers’ Index dropping to 53.9, down from 56.9 in February, marking its lowest level since June 2022. The decrease is attributed to rising costs, competition, and disruptions from the ongoing conflict in West Asia, impacting demand and output.
- 01Manufacturing PMI fell to 53.9, its lowest since June 2022.
- 02Input costs surged, particularly for aluminium and fuels.
- 03Despite challenges, export demand showed growth, especially from countries like Australia and China.
- 04Employment in manufacturing rose at the fastest pace in seven months.
- 05Outstanding business volumes decreased for the first time in 18 months.
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In March, India's manufacturing activity experienced a notable slowdown, as indicated by the HSBC India Manufacturing Purchasing Managers’ Index (PMI), which fell to 53.9 from 56.9 in February, the lowest level since June 2022. This decline reflects softer growth in new orders and output, influenced by cost pressures, fierce competition, and heightened uncertainty due to the ongoing conflict in West Asia. Pranjul Bhandari, chief India economist at HSBC, highlighted that disruptions from the Middle East conflict are negatively impacting Indian manufacturers. Input prices rose sharply, driven by increased costs for aluminium, chemicals, and fuels, yet manufacturers raised output prices at the slowest pace in two years to retain customers. Despite these challenges, the survey noted a rise in employment, with the fastest pace of job growth in seven months, and a significant increase in export demand, particularly from markets in Australia, Brazil, and Europe. Additionally, for the first time in nearly 18 months, outstanding business volumes decreased, aided by increased recruitment and a slower rise in new orders.
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Manufacturers may face tighter profit margins due to rising costs, which could impact pricing strategies and employment in the sector. Consumers might see stable prices for goods as manufacturers absorb costs to retain customers.
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