Due to the nationwide lockdown to contain COVID-19, India's manufacturing PMI (Purchasing Managers' Index) contracted for the first time in the last 33 months in April and stood at 27.4, according to a monthly private sector survey. In comparison, March PMI was at 51.8.
April 2020's recording has been the sharpest deterioration in business conditions across the manufacturing sector since IHS Markit started its data collection over 15 years ago, it said in its report.
The Nikkei Manufacturing PMI, that is compiled by IHS Markit, of 27.4 last month is by far the lowest growth recording since the survey began in March 2005 and its first time below the 50-mark (that separates growth from contraction) in nearly three years.
"After making it through March relatively unscathed, the Indian manufacturing sector felt the full force of the coronavirus pandemic in April," said Eliot Kerr, economist at IHS Markit.
"Record contractions in output, new orders and employment pointed to a severe deterioration in demand conditions."
New orders and output shrunk at the steepest pace since at least early 2005 in April and factories cut jobs at the fastest rate in the survey's history, signalling the possibility of a recession.
A Reuters poll last month showed that economists expect Asia's third largest economy's gross domestic product (GDP) to shrink for the first time since the mid-1990s the current quarter as it takes a huge hit from the ongoing nationwide lockdown which began on 25 March.