A survey done by Industry chamber CII and ASCON has revealed that the number of sectors reporting negative growth in July-September 2013 quarter of the current year has increased significantly over the corresponding period of last year. So, the industrial sector is cautious in moving ahead as economic slowdown is not showing any signs of bottoming out.
“With economic slowdown showing no signs of bottoming out in the near future, industry is cautious in moving ahead. This calls for a concerted effort from policy makers to stay the course on reforms,” CII Director General Chandrajit Banerjee said. The survey shows that out of 91 sectors covered, sectors registering ‘low’ and ‘negative’ growth for July-September 2013 quarter remain significantly high at 84.61 per cent as against 76.1 per cent for the same period last year.
Moreover, the proportion of sectors reporting ‘negative’ growth has risen drastically to 38.46 per cent in July-September 2013 from 15.5 per cent in the corresponding period last fiscal, the survey said.
“The sluggish performance of both producer as well as consumer goods indicate subdued demand conditions in the economy which, going forward, does not sound optimistic for revival of growth in the coming quarters,” the survey said.
The “high” growth sectors have come down to 10.98 per cent this year from 29.1 per cent in the same quarter previous year. Besides, there is a clear shift in number of sectors from high growth (30 sectors last year as compared to 10 this year) and low growth sector to negative growth (16 sectors in negative from last year has increased to 35 sectors), proving that slowdown continues despite monetary tightening and fiscal consolidation measures by the government and RBI.
The disaggregated analysis of the survey reveals that most of the high and excellent growth has been registered by select segments of white goods industry such as refrigerators, air conditioners, small appliances and lCDs/lEDs driven by high rural demand and robust sales in tier 4 & 5 cities. However, it found that the vehicle industry witnessed low to negative growth in most of the segments like motor cycles, three wheelers, utility vehicles, M&HCVs, tyres, cycle tyres.
Unemployed university graduates from across Morocco parade through the capital Rabat during the National Day of the Unemployed to protest the lack of jobs, Sunday Oct. 6, 2013. Rabat is rocked by almost daily protests by unemployed graduates demanding public sector jobs from the Islamist government, which has been under increasing pressure over a faltering economy and efforts to cut expensive fuel subsidies. (AP
The sluggish performance of both producer as well as consumer goods indicate subdued demand conditions in the economy which going forward does not sound optimistic for revival of growth in the coming quarters as well. The Survey respondents have raised concerns over the deteriorating macroeconomic conditions owing to multiple factors, both domestic and global. On the external front, global economic uncertainties, depreciation value of rupee, rising oil prices has contributed to the weak economic environment.
These concerns have further contributed to the weakening of domestic economy leading to lowering investments, decline in exports, soaring inflation, stalled investments, and subdued consumption, among others. Respondents have stressed on the need for reviving the investments in the economy to boost demand.