New orders from overseas rose for the sixth successive month in April, albeit only marginally. Moreover, the rate of expansion moderated to the weakest since November 2017. Following a marginal decline in March, outstanding work rose during April. Delayed payments from clients partly led to the latest increase in backlogs, according to anecdotal evidence.

Improvements in demand conditions and rising production resulted in job creation during April. That said, growth was marginal. Reflecting sustained growth in production and new orders, Indian manufacturers were prompted to raise their purchasing activity for the sixth consecutive month in April. Despite being modest, the rate of increase accelerated to the strongest since January.

Meanwhile, divergences were recorded for both pre- and post-production stocks. The former rose at the fastest pace in 2018 so far, while inventories of finished goods were depleted at the joint-fastest rate in the survey history. Indian manufacturers faced higher input costs during April, thereby extending the current period of inflation to just over two-and-a-half years. Although solid, input cost inflation moderated for the second month in a row to the weakest since last September. Meanwhile, firms raised their selling prices at the weakest rate in the current nine-month sequence of inflation.

Finally, business sentiment was at the strongest level seen since the implementation of the Goods and Services Tax in July 2017. Optimism reflected expectations that new business and demand conditions will improve over the coming 12 months, according to panellists.

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Source: IHS Markit