India’s PMI sees a steep drop as COVID-19 strikes the country hard

For the most part, manufacturing showed strength in May as the Eurozone and four additional countries were comfortably above the 60 percent PMI level. UK manufacturers set the pace as the country surged with a 4.7 percent PMI increase to reach a new high of 65.6 percent. On the other hand, India struggled with a COVID-19 resurgence and reversed the UK number and fell by 4.7 percent to a 50.8 percent PMI reading.

Manufacturing PMI numbers across the world pushed up in April with only the US and Germany showing a decline from March. Of course, Germany and the US were still above the 60 percent mark and notably both Italy and the UK also pushed into the 60th percentile as well. Despite issues from COVID-19, Indian manufacturing grew by one-tenth, while China showed a strong bump of 1.3 percent to reach 51.9 for April. All countries reported strong business optimism despite supply-chain issues and COVID-19 concerns in India.

The latest Manufacturing ISM^® Report On Business^® issued by Timothy R. Fiore, Chair of the ISM^® Manufacturing Business Survey Committee reported a 60.7 percent PMI for April. That represented a decrease of four percentage points from the March reading of 64.7 percent.

Manufacturing across the world continued to surge in March as Germany, the U.S. and the Eurozone all registered PMI numbers above 60 percent. Demand is strong across the world but China slipped 0.3 percent from February to register a 50.6 PMI reading. India also saw a sharp drop off to 55.4 percent after previously pulling back slightly in February from a January reading of 57.7 percent.

Supply Chain Issues and Labor Shortages Present Challenges

Manufacturing in India showed strength with a reported 57.7 PMI from Markit Economics, which represented a fourth straight month of improvement. Italy had a second straight month of growth and a big uptick to a reported PMI of 55.1 percent after registering 52.8 in December. That represents Italy’s highest level since February 2018.

The Institute for Supply Management^® (ISM^®) reported a December PMI^® of 60.7 percent for US manufacturing, up 3.2 percentage points from the November reading of 57.5 percent. That figure was the highest since August of 2018 and also indicates expansion in the overall economy for the eighth month in a row after contracting in March, April, and May.