"An indicator derived from individual diffusion indices measuring changes in output, new orders, employment, suppliers' delivery times and stocks of purchases - fell to 51.0, the lowest reading recorded since November 2011," a release from HSBC PMI states.
The latest fall reflected weaker contributions from all five of its components. Manufacturing production increased fractionally, following a solid rise registered over the first quarter of the year. Evidence suggested that persistent power shortages continued to hamper output, which increased at the slowest pace in the current 49-month expansionary sequence.
Growth in order book volumes was also sustained for the forty-ninth month running during April, amid evidence of firm demand and new product launches.
Nonetheless, the overall rate of expansion was modest and the slowest since September 2011. New business from abroad also rose, marking an eight-month period of expansion. Despite being slight, the pace of growth was faster than in March.
Manufacturing companies in India bought a higher quantity of raw materials and semi-finished goods during April. Input buying increased solidly, but growth eased from March. The latest rise was the forty-ninth in successive months.
Subsequently, pre-production inventories were accumulated, albeit slightly. Similarly, post-production inventories increased during April following a decline in March. The rate of accumulation was, however, only slight. Around 8% of monitored
companies reported a higher stock of finished goods.
Commenting on the India Manufacturing PMI survey, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said:
"Manufacturing activity lost momentum again in April, with output growth slowing further on the back of a deceleration in domestic orders and continued power outages. Export orders, on the other hand, picked up. Encouragingly, input and output price inflation eased. With the growth momentum slowing and inflation receding, the RBI is likely to cut the policy rate this week."