Moneycontrol Eco Pulse Drops in March with Factory Output and Trade Under Pressure

The index dropped to 49 in March from 51.4 in February, with manufacturing, exports, and core sector output declining, while consumption indicators such as vehicle sales and fuel demand remained stable

India’s economic momentum weakened in March, with the Moneycontrol Eco Pulse Index slipping below the 50 mark to 49, indicating a contraction in activity compared to the previous month.
The decline reflects the impact of global developments, particularly tensions in West Asia, which affected manufacturing output, trade flows, and infrastructure activity. A reading below 50 signals a slowdown in economic momentum, even as some segments of domestic demand continued to show resilience.

The Moneycontrol Eco Pulse tracks 38 high frequency indicators across consumption, manufacturing, labour markets, trade, and financial activity, offering a monthly snapshot ahead of official GDP data.
Manufacturing and infrastructure sectors were the main contributors to the decline. The HSBC India Manufacturing PMI fell to 53.9 in March from 56.9 in February, marking a 45 month low and indicating slower factory activity. Core sector output contracted by 0.4 percent after growing 2.8 percent in the previous month, reflecting weaker performance across coal, electricity, refinery products, and related industries.

Electricity demand growth stood at 1.7 percent, lower than earlier months, suggesting softer industrial and commercial consumption. External demand also weakened, with merchandise exports declining 7.4 percent year on year, while imports fell 6.5 percent, pointing to reduced trade activity amid global uncertainty.
Labour market indicators presented a mixed picture. Urban unemployment rose slightly to 6.8 percent, while female labour force participation edged lower. Hiring sentiment also softened, with the Naukri Job Index declining to 9.2 percent from 11.9 percent.

Despite the slowdown in industrial and external sectors, consumption indicators provided some support. Four wheeler sales rose 22.9 percent, while two wheeler sales increased 29 percent. Three wheeler registrations also remained strong, reflecting steady mobility demand. Fuel consumption, including petrol and diesel, showed continued growth, supported by transport and logistics activity.
nflationary pressures increased during the month, with wholesale inflation rising to 3.9 percent from 2.1 percent, likely driven by higher commodity and fuel prices linked to global developments.

The data highlights how global shocks can transmit quickly into domestic economic conditions through supply chains, energy costs, and trade flows. Growth outlooks have also seen adjustments, with Moody’s revising India’s forecast to 6 percent, while other multilateral agencies continue to project growth above 6 percent in the coming fiscal year.
While external pressures weighed on March data, stable consumption and digital payment activity may help support economic momentum if global conditions stabilise in the months ahead.

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