The PMI survey showed manufacturers cut jobs yet again in July, while new orders fell for the fourth straight month. Industry bodies said with a dearth of labour and raw material, supply chains could not be established.
Similar to the trend for output, the pace of decline in new orders accelerated from June, but remained slower than at the height of the current crisis. When explaining falling sales, companies
often cited prolonged closures at their clients’ businesses, the survey said.
The situation was made worse by plunging demand from international markets, which further deteriorated sales trends. India’s biggest overseas markets for merchandise shipments such as the US, Gulf nations, and the European Union have been hit hard by the ongoing pandemic.
Survey participants said international clients were hesitant to place orders while the duration of the pandemic remained uncertain. That said, the latest reduction in exports was the softest in four months.
The PMI survey, however, showed that manufacturers remained optimistic towards the one-year business outlook, with sentiment strengthening for the second month to a five-month high. As a result of reduced output, firms continued to cut their purchasing activity, with the result extending the current run of contraction to fifth months. The latest decline in input buying was faster than in June, said IHS Markit.
On the cost front, input prices faced by Indian manufacturers continued to fall. However, the rate of decrease moderated from June, but remained far softer than April’s survey record. Panellists said subdued demand for most goods more than offset the inflationary effects of shortages in some raw materials.
Experts say the aftershocks of the lockdown continued to weigh on domestic industry, even as an uneven recovery started taking shape.
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