The manufacturing Purchasing Managers’ Index (PMI) for India declined to 51.8 in March from 54.5 in February. A reading above 50 indicates expansion, while below it signals contraction.
The reading signalled the slowest improvement in business conditions since November 2019.
“The Indian manufacturing sector remained relatively sheltered from the negative impact of the global coronavirus outbreak in March, however, there were pockets of disruption and a clear onset of fear amongst firms,” said Eliot Kerr, Economist at IHS Markit.
Contributing to the downward momentum was a record decline in new export orders, with international demand faltering amid the global coronavirus disease 2019 (COVID-19) outbreak.
The decline in international sales was the fastest since September 2013 amid widespread lockdowns due to the covid-19 pandemic.
Looking forward, confidence towards the business outlook plummeted to a record low, with positivity tapered by Covid-19 concerns.
Firms remained confident of a rise in output overall, but positivity hit its joint-weakest level since the series’ inception in April 2012.
Kerr said the most prominent signs of trouble came from the new export orders and future activity indices, which respectively indicated tumbling global demand and softening domestic confidence.
“Should the trajectory of injections continue in the same vein, the Indian manufacturing sector can expect a much sharper negative impact in the coming months, similar to the scale seen in other countries,” Kerr added.
As per the survey report, there was also evidence that the virus negatively impacted the supply-side of the sector, with suppliers’ delivery times lengthening for the first time in five months.