"Factories across India continued to report improving operating conditions in April. That said, growth of both production and new orders moderated in the latest month. On the price front, input costs and charges rose at softer rates that were weaker than their respective long-run averages," a release from Markit says.
Amid reports of stronger demand, new orders received by Indian manufacturers grew further in April. That said, the overall pace of expansion eased slightly since March, as increased competition for new work and the elections reportedly hampered growth. Incoming new business rose at consumer and intermediate goods producers, while a reduction was noted in the investment goods sub-sector.
Commenting on the India Manufacturing PMI survey, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said:
"The momentum in the manufacturing sector held broadly steady, with domestic demand countering a slowdown in export orders. However, a build-up in finished goods inventories could weigh on output growth in coming months in the absence of a pick-up in demand. Encouragingly, inflation pressures eased, but that does not mean that the RBI can take down its inflation guards."
Growth of new export orders eased from March's 35- month peak to the slowest since January. Overseas demand improved at consumer and intermediate goods firms, whereas capital goods producers recorded lower foreign orders in April.
Indian manufacturers indicated that staffing levels rose for the seventh month running in April. The rate of employment growth was, however, fractional overall as the majority of survey participants (around 97%) indicated no change in employee headcounts since March.
Average purchase costs increased in April, amid evidence of higher prices paid for metals, chemicals, plastics, paper, textiles and energy. However, the rate of cost inflation softened to the slowest since last May. Additional cost burdens were partly passed on, as tariffs rose further. Nevertheless, the rate of charge inflation was only marginal and the joint-weakest in the current eleven-month inflationary sequence.