IHS Markit, one of the key indicators of the economic condition of the country says that the local lockdown will affect the manufacturers who hold around 15% share in the GDP of the country. According to IHS data, the Indian PMI decreased to 55.4 last month as against February when it was 57.5. They fear that April is going to decelerate this number more!
April Going to Bring More Challenges
The PMI data reveals the depleting economic condition of the country amidst the pandemic outburst. The economics associate director of IHS Markit, Pollyanna De Lima says that the year 2021 started off on a good note but the latest developments in the spike in corona cases followed by lockdown seem to affect the manufacturer’s industry extensively. She says, “Survey participants indicated that demand growth was constrained by the escalation of the Covid-19 pandemic, while the rise in input buying was curtailed by an intensification of cost pressures”. She further added, “After starting 2021 on a stronger footing than it ended 2020, the manufacturing sector lost further growth momentum in March. Production, new orders and input buying expanded at softer rates.”
PMI Calculation Indices
The PMI is calculated on responses to questionnaires from around 400 manufacturers. A “diffusion index” is then calculated based on the response. However, the index is calculated on “the sum of the percentage of ‘higher’ responses and half the percentage of ‘unchanged’ responses”. A total of 5 indices are followed while calculating the weightage of the diffusion that includes new orders, output, employment, suppliers’ delivery time, and stocks of purchases.
TPT Policy Advocacy and Recommendations
- The government must make available the vaccine for every common people to control the pandemic and its aftereffect on the common people’s lives.
- Business firms must see that the work is carried out from home and within safe limits of the office as much as possible so that both the health and the finances of the employees are well taken care of!