India PMI For March 2014 Stood At 51.3

The HSBC India manufacturing Purchasing Managers Index (PMI) for March stands at 51.3, showed a contraction from the previous month PMI of 52.5, signaling a weaker improvement in the business conditions of goods production in India. The manufacturing activity across the country remained weaker as compared to previous month. The competitive pressure and shortage of raw material hampered the growth of manufacturing activity. Whereas, the consumer goods segment outperformed from straight five months and supported the level of overall PMI above 50 (the PMI above 50 means expansion in manufacturing and production activities). The improved demand conditions in the key export markets boosted the new orders picking-up in the month. Contrary, the capital goods segment remained weaker. 

The manufacturing employment for March month expanded sequentially from last six months, though the new job creations remained marginal for the month. The overall inflation eased at a comfortable level from past couple of months. The input cost for manufacturers like raw material costs showed a marginal increase in the last nine months. 

The Chief Economist for India & ASEAN at HSBC, Lief Eskesen said "The momentum in the manufacturing sector eased on the back of a slowdown in order flows and raw material shortages. Meanwhile, inflation also moderated. Growth is likely to remain moderate in coming months as fiscal tightening, relatively high corporate leverage, and rising non-performing loans in the banking system pose headwinds to growth. While we might see traction on economic reform and execution of investment projects after the upcoming elections, the recovery in growth is likely to prove protracted.”