India PMI March 2020

India: Private sector PMI reading tumbles in March

The composite Purchasing Managers’ Index (PMI) produced by IHS Markit slumped to 50.6 in March, down from 57.6 in February and marking the lowest reading in five months. A reading above 50 indicates a rise in business activity since the previous month. The turn for the worse in March was due to the global coronavirus pandemic negatively impacting business activity.

However, the survey response collection period ran ended on 27 March, which was just after the government ordered a shutdown of the country to slow the spread of the virus. This led Joe Hayes, economist at IHS Markit, to comment: “Clearly the worst is yet to come as nationwide store closures and prohibition to leave the house will weigh heavily on the services economy, as has been seen elsewhere in the world. Pressure now fully lies on the government to combat the economic challenges the lockdown will cause.”

The services PMI fell to 49.3 in March, down from 57.5 in February, driven by a decrease in new orders—especially from abroad—and total output. Consequently, service providers reduced headcounts in March, although the reduction was only mild. Backlogs of work, meanwhile, rose slightly, while input cost inflation eased and output charges rose at a slower pace. Turning to the future, service providers remained confident that activity would improve in the next 12 months, although confidence slipped to a five-month low.

On the manufacturing side, the PMI dropped to 51.8 in March from 54.5 in February, as new orders and total output both slowed compared to the previous month, with new orders particularly suffering from a heavy drop in fresh export contracts, the fastest since September 2013. As a result, hiring activity moderated significantly. In terms of supply conditions, vendor lead times worsened slightly in March, while, on the price front, input and output prices both rose. Regarding the outlook, expectations of output over the coming 12 months worsened to the joint lowest level on record.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest