What does the PMI at 50.8 tell about the Indian economy?

PMI manufacturing, contracted month on month to 50.8 in May 2021 from 55.5 in April 2021. This marks a 10-month low level for PMI manufacturing. What needs to be remembered is that since the PMI is above the 50-level, manufacturing is still in expansion mode, although there is loss of momentum in manufacturing.

That means; output is still expanding but on a sequential basis, the growth momentum is waning. That is largely on account of the resurgence of COVID 2.0 and its lag effect on factory production and order flows. In fact, most of the key PMI variables like sales, output, raw material purchases, new orders and jobs came under pressure during the month of May 2021.