New Delhi, May 3 (KNN) India's manufacturing sector in April slid to its slowest pace since November 2011 owing to power outages, a survey by Markit Economics said.

The HSBC Purchasing Managers' Index (PMI) for the manufacturing sector dropped to 51 in April from 52 in March, hitting the lowest level since November 2011.  An index reading above 50 indicates expansion in the sector, while one below suggests contraction.

"Manufacturing activity lost momentum again in April, with output growth slowing further on the back of a deceleration in domestic orders," Chief India economist at HSBC, Leif Eskesen, said in a statement on Thursday. 

Affected by the severe power shortage, production in Indian factories increased at the slowest pace in forty-nine months in April, after recording strong growth in the first quarter of the year, the survey showed.

Despite the increase in the new orders received by manufacturers for the forty-ninth successive month in April the rate of growth was the slowest since September 2011.

The average input price of the companies increased substantially due to purchase of higher quantity of raw materials and semi-finished goods in April.  Although input buying increased markedly, the rate of purchase eased from March. Around 8 per cent of the monitored companies reported a higher stock of finished goods.

In addition, the manufacturers increased their workforces further during the month, extending the current period of job creation to 14 months. The surveyed firms linked the rise in employment levels to higher production requirements, but hiring was stymied by labour shortages. 
 
Average input prices rose solidly, but at the slowest rate since June 2010.  Factory gate prices increased modestly during the month as competitive pressures prevented firms from passing the full cost burden on to clients.

The survey also validated the recent drop in inflation, showing a drop in both input costs and price charged to the customers in April from the month before. (KNN)