Manufacturing activities which took a backseat following the economic slowdown, coronavirus outbreak and lockdowns, is finally showing some promise. Industries have restarted their operations in a calibrated way to ensure lives and livelihoods go hand-in-hand.
India’s Manufacturing Purchasing Managers’ Index (PMI) for August was recorded at 52 as against 46 for July, a month ago. For the first time since March when the nation-wide lockdown was imposed, output expanded in the manufacturing sector in August.
Production growth was driven by customer demand for Indian origin goods following the resumption of business operations. There was a good increase of new orders and outputs this season, after a very long time.
However, job loss remains a matter of concern since the last five months although the pace of contraction in workforce softened slightly in August as against July, it still remained very strong. Supply chains continue to be disrupted for the sixth consecutive month due to transport restrictions and select locking, especially in containment zones. We are seeing longer delivery cycle than usual.
Higher raw material costs due to supply shortages and transportation delays led to rising input prices during August. This is likely to continue until the Covid-19 pandemic gets eradicated completely. On the whole, manufacturers are optimistic that once the vaccine hits the market and conditions gets back to normal then the business will bounce back.
