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Manufacturing growth slows in May
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SME Times News Bureau | 01 Jun, 2021
India's manufacturing sector growth slowed down considerably in May, as
the second wave of Covid-19 impacted demand and order flow.
The PMI ranges between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month.
Accordingly,
the headline seasonally adjusted IHS Markit India Manufacturing
Purchasing Managers' Index (PMI) inched up to 50.8 (index reading) in
May same as 55.5 in April.
The latest index reading pointed to a
marginal improvement in business conditions that was the weakest in the
current ten-month sequence of expansion.
"New orders, the largest
sub-component of the headline figure, increased at a marginal pace that
was the slowest since the current stretch of expansion started in
August 2020. According to panel members, demand was suppressed by the
Covid-19 crisis," IHS Markit's May PMI report said.
"Firms
scaled up production volumes during May, but the pace of expansion was
modest in the context of historical data. In fact, the rise was the
weakest in the current ten-month period of growth. Anecdotal evidence
indicated that the upturn was curbed by the escalation of the pandemic
and difficulties in securing raw materials."
Besides, May PMI
report said that although new export orders increased at a softer rate,
the upturn was solid and outpaced the long-run series trend.
"The
Indian manufacturing sector is showing increasing signs of strain as
the Covid-19 crisis intensifies. Key gauges of current sales, production
and input buying weakened noticeably in May and pointed to the slowest
rates of increase in ten months. In fact, all indices were down from
April," said Pollyanna De Lima, Economics Associate Director at IHS
Markit.
"Amid a lack of new work, goods producers reduced headcounts again, with the rate of job shedding quickening in May."
According
to IHS Markit's Economics Associate Director, the detrimental impacts
of the pandemic and associated restrictions seen in the manufacturing
sector are considerably less severe than during the first lockdown when
unprecedented contractions had been recorded.
"Growth
projections were revised lower, as firms became more worried about the
escalation of the pandemic and local restrictions."
"The overall
degree of optimism towards the year-ahead outlook for output was at a
ten-month low, a factor which could hamper business investment and cause
further job losses."
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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