India manufacturing PMI decelerates for a second straight month in January 2022, to 54.0

The manufacturing PMI for India decelerated for second consecutive month
The manufacturing PMI for India decelerated for second consecutive month
The manufacturing PMI for India decelerated for second consecutive month

The manufacturing PMI for India decelerated for second consecutive month in January 2022, to 54, from 55.5 in December, primarily due to the renewed restrictions across states to contain the third wave of COVID-19. On the bright side, the pace of deceleration moderated, as the January value of the PMI reduced by 1.5pts, as compared to 2.1pts in December. This suggests that manufacturing activity might pick up as normalcy is restored, but India’s subdued consumption demand poses a downside risk.  

The manufacturing PMI for India decelerated for second consecutive month in January

In terms of major components, the output index, and new orders index, both decreased to 56.6 in January, from 58.4 in the previous month. The fall in the value of new export orders was less pronounced over the same period, from 51.3 to 51.1. The quantity of purchases reduced to 57.3 in January, by 0.8pts, while stocks of purchases, which measures the level of inventory materials purchased, reduced by 2.1pts to 55.3. Stocks of finished goods, which had climbed up persistently for three months between October and December, decreased to 44.3 in January from 44.7 in the previous month. Backlogs of work orders, that is, sales orders that are not started or not completed, expanded to 50.5 in January 2022, recording the first ever increase beyond the 50-mark, since April 2021 when the second wave hit India.

The suppliers’ delivery times picked up from 47.9 in December, to 48.5 in January. The employment index, which had crossed over to the expansion mode in November, reduced for a second straight month in January, to 48.4, back in the contraction mode. Input prices index eased for a fourth month, to 58.4 in January. Output prices, on the other hand, increased to 51.7, marking a growth of 0.7pts over the previous month. In December 2021, capacity utlisation improved to 51.2 from 50.3 in the previous month, and the orders inventories ratio declined to 1.3 from 1.4 in the prior month. 

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Further data and analysis on India’s economy are available on the CEIC India Economy in a Snapshot – Q4 2021 report.

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1st February 2022 India manufacturing PMI decelerates for a second straight month in January 2022, to 54.0