India: Manufacturing PMI catches up in April – Nomura

Analysts at Nomura note that India’s manufacturing PMI rose to 51.6 in April from 51.0 in March, an uptick after three months of decline.

Key Quotes

“The rise has been primarily driven by an increase in new orders, both in domestic and export markets. The new orders-to-inventories ratio jumped from 1.14 in March to 1.17 in April, above the long-term average.”

“Inflationary pressures seem to be capped. The input price index has moderated to its weakest level since September 2017. Similarly, firms have kept output prices benign, suggesting that price pressures built up in February eased significantly.”

“The improvement in April came primarily in the consumer goods sector, while the investment goods sector disappointed. Overall, we believe this print bridges the divergence we saw between relatively modest PMI data and strong industrial production. The moderation in input and output costs suggests that the improvement in orders and business sentiment has not been accompanied by increased price pressures.”