New Delhi, March 2 (IANS) Pollyanna de Lima, Principal Economist at IHS Markit has said that alarm bells are ringing for Indian goods producers as the COVID-19 outbreak poses threats to exports and supply chains.
Commenting on February’s India Manufacturing PMI which stood at 54.5 from 55.3 in January, Lima said that “businesses became less confident about the year-ahead outlook for output, in turn restricting hiring activity”.
A reading above 50 indicates an overall increase compared to the previous month.
“The subdued mood restricted hiring activity in February, with the latest rise in jobs the weakest in three months and only fractional overall,” IHS Markit said.
However, manufacturing production, the firm said, increased at a similar pace to January’s 91-month high, as firms reacted positively to new business gains and favourable market conditions
Growth was led by consumer goods makers, followed closely by intermediate goods producers.
Aggregate new orders increased sharply in February, with growth little-changed from January’s recent high, the report noted.
“February data showed that exports contributed to the expansion in total sales, with Indian companies noting the second-strongest improvement in international demand for their goods since November 2018,” IHS Markit observed.
There was a notable rise in new orders from abroad at consumer goods producers and modest gains in the intermediate and capital goods sectors.
Although manufacturers expect further increases in demand to support output growth in the year ahead, the degree of optimism weakened from January and was below its long-run average.
Survey members were particularly worried about the negative impacts of the coronavirus epidemic on exports and supply chains.
The subdued mood restricted hiring activity in February, with the latest rise in jobs the weakest in three months and only fractional overall.
The virus has spread to more than 60 countries, prompting the WHO to raise its risk assessment to its highest level.
Worldwide, nearly 3,000 people have died and more than 87,000 infected since the coronavirus outbreak in China.