The Manufacturing Sector Slows Down In June
The manufacturing sector slows down in June, know what is the reason: Manufacturing PMI India June 2021.
The manufacturing sector has been hit for the first time by Covid 19. The manufacturing sector activity declined in June for the first time in 11 months due to strict local restrictions due to the pandemic.
Due to this, a large number of people lost their jobs. The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) declined to 48.1 in June from 50.8 in May.
However, the production of 8 basic sector industries has increased by 16.8 percent during the month of May as compared to a year ago.
This increase was driven by a lower relative base for the previous year and increased production of natural gas, refinery products, steel, cement, and electricity.
Business activity stops.
PMI fell below the 50 marks for the first time since July 2020. A score above 50 in PMI language means expansion in activities, while a score below 50 indicates contraction.
The latest figures reveal fresh contracts in the orders, production, exports, and purchases of factories.
Apart from this, during the month under review, there was a decrease in positivity regarding business and people also faced unemployment.
The Covid 19 restrictions also reduced international demand for Indian goods and led to a drop in new export orders for the first time in 10 months.
IHS Markets Joint Director of Economics Pauliana De Lima said that the outbreak of Covid 19 in India had a negative impact on the manufacturing economy.
New orders, production, exports, and purchases were disrupted in June. Lima, however, said the rate of contraction was lower in all respects than in the first lockdown.
The boom in basic industries.
On the other hand, in May last year, due to the nationwide lockdown to control the spread of covid 19 infection, there was a big decline of 21.4 percent in the production of these 8 basic industries.
In March this year, growth of 11.4 percent was achieved in these industries and 60.9 percent in the month of April.
The high growth achieved in April 2021 is also the main reason for the relatively low base from a year ago. In April 2020 too, business activities were completely closed due to the nationwide lockdown.
Gas production 20.1%.
According to the data released by the Ministry of Commerce and Industry, in May 2021, the production of natural gas in basic sector industries was 20.1 percent.
Production of refinery products 15.3 percent, steel production in May this year 59.3 percent, compared to May a year ago, 7.9 percent of cement. Electricity generation has increased by 7.3 percent.
The same last year, production in these areas in the month of May decreased by 16.8 percent, 21.3 percent, 40.4 percent, 21.4 percent, and 14.8 percent respectively.
This is the reason why this year’s production is showing good growth on top of last year’s big decline.
