Indias factory activity grew at its weakest pace in seven months in March as renewed lockdowns to curtail a resurgence in COVID19 cases dampened domestic demand and output, a private survey showed, forcing firms to cut headcount again.

Last week, the Indian government advised federal states to try and control the rapid spread of the virus. Tighter restrictions on activity suggest factories could be in for a tough April.

The Nikkei Manufacturing Purchasing Managers Index , compiled by IHS Markit, declined to a sevenmonth low of 55.4 last month from Februarys 57.5, but remained above the 50level separating growth from contraction for an eighth straight month.

Despite foreign orders growing at a faster pace in March, a subindex tracking overall demand declined to its lowest since August 2020. Output also grew at its weakest pace in seven months.

Survey participants indicated that demand growth was constrained by the escalation of the COVID19 pandemic, while the rise in input buying was curtailed by an intensification of cost pressures, said Pollyanna De Lima, economics associate director at IHS Markit.

With COVID19 restrictions expanded and lockdown measures reintroduced in many states, Indian manufacturers look set to experience a challenging month in April.

Although Asias thirdlargest economy was predicted to grow at a faster pace this fiscal year than previously thought, according to a Reuters poll published last week, a significant majority of economists said a…