The headline seasonally adjusted IHS Markit India Manufacturing PMI fell to 51.8 in March, from 54.5 in February, signalling the slowest improvement in business conditions since November 2019.
This is the 32nd consecutive month that the manufacturing PMI has remained above the 50-point mark.
In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.
“The Indian manufacturing sector remained relatively sheltered from the negative impact of the global coronavirus outbreak in March, however, there were pockets of disruption and a clear onset of fear amongst firms,” Eliot Kerr, Economist at IHS Markit, said.
Moreover, the confidence towards the business outlook plummeted to a record low, with positivity tapered by COVID-19 concerns, the survey said.
“Should the trajectory of injections continue in the same vein, the Indian manufacturing sector can expect a much sharper negative impact in the coming months, similar to the scale seen in other countries,” Kerr said.
According to the survey, the sentiment towards the 12-month business outlook weakened in March. Some panelists said there are fears of prolonged shutdowns due to COVID-19 and the associated negative impact on demand.
Commenting on the latest India survey results, Kerr said new orders and output both grew at softer rates, but those readings were relatively tame compared to those seen at goods producers in Europe and other parts of Asia.
“The most prominent signs of trouble came from the new export orders and future activity indices, which respectively indicated tumbling global demand and softening domestic confidence,” Kerr noted.
New orders placed with Indian manufacturers rose at a slower pace in March, while, new export business fell sharply.
“In fact, the decline in international sales was the fastest since September 2013 amid widespread lockdowns due to the COVID-19 pandemic,” the survey noted.
The number of deaths around the world linked to the new coronavirus has crossed 47,000. In India, nearly 2,000 coronavirus cases have been reported so far.