India: PMIs signal moderation in economic conditions in April
May 4, 2016
The manufacturing Purchasing Managers’ Index (PMI), elaborated by Nikkei and Markit, fell from March’s 52.4 to a four-month low of 50.5 in April. Despite the fall, the PMI lies above the 50-threshold that separates expansion from contraction in business activity in the manufacturing sector.
According to Nikkei, April’s result came on the back of a slower increase in output and stagnant growth in new orders. Meanwhile, employment remained broadly unchanged and input cost inflation rose. Markit analysts commented that, “a softer overall increase in output prices meanwhile suggests a strongly competitive environment, as cost inflation in fact accelerated to the fastest since May 2015.”
In addition, the Nikkei services PMI edged down in April, falling from March’s 54.3 to 53.7, but remained in expansionary territory. According to Nikkei, April data pointed to softer but still solid growth in services business activity. Markit analysts commented, “Manufacturers appear to be still struggling to generate strong upward momentum in a subdued demand environment, while solid increases in activity and new work were sustained among service providers.”