According to a private survey that was shown on Monday, even though the production has increased, unemployment has worsened as companies continued to reduce manpower.
The nation's auto manufacturing sector ended the year 2020 on a brighter note as the automakers boosted their production to meet rising demands of vehicles. According to a private survey that was shown on Monday, even though the production has increased, unemployment has worsened as companies continued to reduce manpower. The manufacturing sector has been one of the main driving forces in the recovery of India's economy after the slump that was created early in the year 2020 due to Covid-19. The auto business across the country are slowly improving after decreasing at an annual pace of 23.9% and 7.5% respectively in the quarters of April-June and July-September.
The Nikkei Manufacturing Purchasing Managers' Index, which has been compiled by IHS Markit, has grown slightly to 56.4 in December from 56.3 in the month of November. Pollyanna De Lima, economics associate director at IHS Markit said that the latest PMI results for the country's manufacturing sector are pointing to a repairing economy, as an increase in the demand and the efforts of the company indicated another sharp rise in production.
The production of new orders, as well as the output, continued to rise, even though at a slower pace. The exports, however, rose at a very slow pace due to the recent surge in coronavirus cases, which in turn has affected the overseas demand. Even after a rise in demand, the labour market has not yet improved and the manufacturers are continuing to cut jobs.
Commenting on the employment situation, De Lima also said that the survey has brought the bad news of a decrease in the employment sector. De Lima further said that on the bright side, the trend for jobs is now moving towards the right direction and the rate of contraction is minimum as compared to the last nine months.
The prices for raw materials have increased at a fast pace, which in turn will squeeze the profit margins as the producers were not able to fully pass on these costs to the customers. Even though the carmakers are optimistic about production in the upcoming 12 months, there are concerns regarding the rising prices and the economic impact of the pandemic in the automobile sector of the country.