New Delhi: Country’s manufacturing sector growth slowed in March from a one-year high in February largely due to decline in new order inflows from domestic clients, according to HSBC India Manufacturing Purchasing Managers' Index (PMI).
HSBC’s India manufacturing PMI declined in March to 51.3 against 52.5 in February. However, manufacturing sector growth remained in the positive zone. Any number below 50 indicates contraction in growth. HSBC said that looking ahead, the recovery is likely to prove protracted.
“The momentum in manufacturing eased led by a slowdown in domestic demand. Raw material shortages, increased competition and elections were cited by panellists as reasons for weak output growth and order flows. Fiscal tightening may also have played a role,” said HSBC
Meanwhile, external demand firmed, particularly for consumer goods. Investment, however, remains the weakest link, with panellist pointing to a still soggy investment climate.
It said that in the near term, there are several factors constraining growth. Fiscal tightening to meet consolidation targets in FY2014-15 is one, said HSBC.
It said that while new orders (52.7 against 54.9 in February) slowed, new export orders (56.8 against 54.1 in February) accelerated.
