Growth in India’s domestic factory orders and production slowed to a 10-month low in May as most states restricted businesses to slow down the spread of Covid-19. Overall manufacturing activity slowed down and job loss accelerated in May, according to a private survey report. The IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) slipped to 50.8 in May against 55.5 in April, making it one of the steepest fall. PMI is a month-over-month indicator and shows changes over the previous month, and not over the previous year.

“Indian manufacturing sector is showing increasing signs of strain as the COVID-19 crisis intensifies. Key gauges of current sales, production and input buying weakened noticeably in May and pointed to the slowest rates of increase in ten months. In fact, all indices were down from April,” said Pollyanna De Lima, economics associate director at IHS Markit, in the report.

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The report said firms scaled up production volumes during May, but the pace of expansion was modest in the context of historical data. In fact, the rise was the weakest in 10 months. Anecdotal evidence indicated that the upturn was curbed by the escalation of the pandemic and difficulties in securing raw materials. Although new export orders also increased at a softer rate, the upturn was solid and outpaced the long-run series trend.